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Ohio bankruptcy laws: What you should know

On Behalf of | Feb 9, 2019 | Bankruptcy

Filing bankruptcy is not a decision to take lightly. It means your debt is insurmountable and will not go away in continuing circumstances.

When you decide you need to stop the collection calls and certified letters, bankruptcy may become the answer. The laws in Ohio classify bankruptcy in different categories. Do you know which one is right for you?

Chapter 7 bankruptcy

If you own property and your debt is out of control, you may need to file under Chapter 7 bankruptcy. In this kind of filing, you, as the debtor, will undertake a process of liquidation or selling of your property and assets to pay off all or some of your overdue bills. Negotiation with creditors to lower the balance of debts may take place, especially if selling property covers the lower amount.

Chapter 13 bankruptcy

The most common bankruptcy filed by individuals is Chapter 13. This is a reorganization and payment plan system in which the debtor and creditors all come to an amenable debt repayment blueprint. The different sides negotiate down the total due. Once the plan is complete, meaning the debtor has paid all creditors per the terms of the repayment plan, the debts get discharged.

Other forms of bankruptcy

In Ohio, companies can declare bankruptcy under Chapter 11, which allows a company reorganization to pay some or part of the debt. Chapter 12 bankruptcy is for farmers to sell off farm assets to get out from burdensome loans and debts. While each of these is a viable road to bankruptcy, they apply to more specific situations than Chapters 7 and 13.

If you feel like bankruptcy will help get you caught up and on a better financial path, speak with an expert who can help get you started on the right foot. Getting out from under creditors and crushing debts may make all the difference in the world.