Before considering bankruptcy, you should discuss your particular situation with a qualified bankruptcy attorney. Some of the questions you should be asking yourself are how much your income is and what your future goals and earning power is.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is often called the liquidation bankruptcy. This type of bankruptcy eliminates all your unsecured debt without making any payments to a plan.
You must give up your nonexempt property in this type of bankruptcy. The court-appointed trustee will sell your assets and distribute the money among your creditors. Secured debt such as your cars or homes will not be discharged. You can decide if you want to forfeit your secured assets to be able to discharge the debt.
Most of the time people who file Chapter 7 bankruptcy have enough exemptions to be able to keep all of their assets. Chapter 7 takes from three to six months to complete and at the end of that time, all qualifying debt will be eliminated.
Chapter 13 Bankruptcy
Also called the reorganization bankruptcy, Chapter 13 involves a court-approved repayment plan. The purpose of the plan is to pay back all or part of your debt over a three to five year period. To be able to file this type of bankruptcy, you must have a reliable source of income so you can make the payments.
The repayment plan will account for both secured and unsecured debt and will be based on your income. It is a law that your payments can not last longer than five years. At the end of the repayment period, any qualifying debt left over will be eliminated.
It is always wise to speak to an attorney to make sure you are getting all the exemptions you are entitled to and filing the right kind of bankruptcy for your finances.
A Cincinnati bankruptcy attorney will look at your situation and help you decide which is best for you, Chapter 7 or Chapter 13 bankruptcy.