Bankruptcy can be a great way to relieve you of some or all your debt problems, but the laws regarding bankruptcy can be complex. There are, in fact, two types of bankruptcy available for individuals: Chapter 7 and Chapter 13.

An explanation of bankruptcy in Ohio
There are fundamental aspects of bankruptcy that apply to both Chapter 7 and Chapter 13, but it is the differences that will determine which one you should file for.

Chapter 7 bankruptcy
Chapter 7 is akin to what people think of when they hear about bankruptcy. It applies to most of your debt and is ideal for people with low income and few assets. If you are in a situation where you are barely able to survive with your current income and may not even have enough money to pay your monthly debt payments, a Chapter 7 bankruptcy may be right for you.

If you have low income, but have some assets, a judge may order the liquidation of these assets to pay part of the debt you owe your creditors before discharging the balance. However, Ohio bankruptcy laws allow for certain exemptions. Examples include your home and your car. There are rules regarding both your home and car, and there are a few other assets that are covered by Ohio laws as well. It is important to consult with an attorney regarding your specific situation.

Chapter 13 bankruptcy
A Chapter 13 bankruptcy can be thought of as a repayment plan. A judge will look at all or your assets, after exemptions, as well as your income, and then create a repayment plan. All of your debts are combined and often reduced. A monthly payment is made to a trustee of the court, and the money is then divvied out to your creditors. This payment plan will only last from three to five years. After this, your bankruptcy will be discharged, and you will be debt free. This type of bankruptcy is a good way to get back on your financial feet.

The following is a partial list of assets that are exempt in Ohio
Up to a maximum of $145,425 of real property, if it is your residence.
Up to a maximum of $13,400 of personal property, but no single item can be worth over $625.
You are allowed as much as $1,700 of jewelry and $2,550 worth of job related tools.
One car with equity of no more than $4,000.
75 percent of weekly paycheck.

This is just a sampling of the exemptions, and because the laws are always subject to change, you should speak with a lawyer about how the most recent laws apply to your assets.

Along with exemptions for certain assets, there are also certain debts that are not subject to bankruptcy. Back child support is an example of a debt that will not be discharged. Certain taxes are another, but it should be noted that a lawyer may be able to help reorganize these types of debts under a Chapter 13 filing.

Always keep in mind that although bankruptcy can provide relief from your debt problems, your first step should be to consult with a bankruptcy attorney. We welcome you to contact us here at Granger Law Firm today for your free consultation.