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Common Bankruptcy Questions for Residents of Ohio & Kentucky

Tuesday, April 21, 2009 by Adrian King

Frequently Asked Questions About Bankruptcy

What is bankruptcy?
A legal procedure that allows individuals or businesses ("debtors") who owe others ("creditors") more money than they're able to pay to work out a plan to repay the money over time or remove ("discharge") most of the bills.
What are chapters 7, 11, 12, and 13?
Straight bankruptcy refers to Chapter 7. It provides for liquidation of some assets to pay creditors in exchange for discharge of most debts. It makes sense when debts exceed assets by a significant amount.
Chapter 11 applies to businesses. This chapter allows businesses to restructure debt payments and keep assets.
Chapter 12 allows farmers and fishermen to get debt adjustments.
Chapter 13 allows consumers to restructure debt payments and keep assets.
What is the difference between secured and unsecured debt?
Secured debt is a creditor's claim that is secured by a lien of some type such as a mortgage or pledge of collateral in your property. A creditor can generally claim the property that secures the debt in the event of bankruptcy. Unsecured debt is not tied to any property. Creditors generally extended unsecured loans based solely on an assessment of the debtor's ability to pay. Examples of unsecured debt include credit cards and payday advances.
What type, or chapter, of bankruptcy should I file?
Bankruptcy may result in a discharge of debt or the restructure of debt payments. Chapter 7 discharges debt while Chapters 11 and 13 restructure debt. Chapter 11 applies to businesses and chapter 13 applies to consumers. Each bankruptcy chapter specifies the debts eligible for discharge, eligibility requirements to qualify for use of the specific chapter, payment choices, and other important information to consider before selecting which chapter, if any, under which to file. Selecting which type to file depends on individual circumstances.
For more info about Bankruptcy law in Ohio and Kentucky visit our, "Ohio Bankruptcy Legal Help Page."
If you need immediate legal help with bankruptcy law in Ohio, call us at 877.372.1202 or stop by our office located at 36 N. Detroit, Suite 104 Xenia, Ohio 45385
We also provide comprehensive legal services to clients in Xenia, Dayton, Columbus OH, and throughout the states of Ohio and Kentucky such as: