When debtors cannot pay their creditors back, bankruptcy proceedings are legal proceedings to which they have the right to. After a bankruptcy filing has been made, creditors have to wait for the court’s decision on how their money will return. Declaring bankruptcy exempts the bankrupt entity/individual from any legal obligation to repay all or most of the debt.
A bankruptcy filing does not need to be filed with a lawyer. But bankruptcy filings can be complicated and it can be difficult to determine which type of bankruptcy is best for your situation. Assets are also vulnerable to certain types of bankruptcy. A lawyer can help an individual to understand the bankruptcy process. A lawyer can also help clients decide whether consumer credit counseling is a better option than declaring bankruptcy.
The most common of the five types are Chapter 7 bankruptcy and Chapter 13. Chapter 7 bankruptcy allows debtors to get rid of or eliminate any outstanding debts. This gives them a fresh start financially. Certain types of debts can’t be discharged and certain property cannot be sold. Proceeds will be distributed to creditors. Chapter 13 bankruptcy proceedings include a repayment plan to repay outstanding debts for three to five year.
Family members or friends may be able recommend a great bankruptcy lawyer. Local and state bar associations in Ohio can provide contact information for bankruptcy lawyers. A bankruptcy lawyer can be costly, especially if the individual is in financial distress. In Ohio, the Ohio State Legal Services Association works with private lawyers to offer bankruptcy assistance at a reduced cost for those who are eligible. Many organizations, including the Columbus Bar Association’s Legal Aid Referral Project provide free legal assistance for low-income people who cannot afford a lawyer.