Bankruptcy
The Romano Firm wants to help free you from debt. Here we’ll explain bankruptcy in general. We are a law firm with offices in Cleveland and Columbus, Ohio.
The 3 Types of Debt:
1. Secured Debt Any debt where, if you do not pay your creditor has the right to take back the property. This is usually houses (foreclosure), cars (repossession), or other types of property like jewelry and computers where you sign a “security agreement.”
2. Priority Debt There are three (3) kinds of this debt: child support, alimony, and back owed taxes (income tax or property tax). All three can be discharged, but it can only be accomplished by court action and only in extreme financial circumstances.
3. Unsecured Debt The easy way to define: If it IS NOT secured or priority (see above) it is unsecured.
The 4 Types of Bankruptcy:
1. Chapter 7 Also known as the “Fresh Start” bankruptcy, Chapter 7 allows you to discharge all of your unsecured debt. Unless you qualify for discharge of priority debts you will have to pay these debts back. While you may be able to keep your secured debts it is going to be based on some financial standards – you must seek advice of an attorney on this issue.
2. Chapter 11 Reorganization for Corporations or other types of businesses ONLY.
3. Chapter 12 Reorganization for farmers ONLY.
4. Chapter 13 Reorganization and repayment of debt for Debtors/Consumers. If you qualify, you make monthly payments to the court in order to pay off ALL secured and priority debts you owe or are behind on (mortgage arrears/income or property tax arrears/child support arrears). You even have the opportunity to pay off and buy your car. Payback plans usually last between 36 and 60 months, depending on how much you owe.
Chapter 7 and Chapter 13 are commonly known as the “Consumer Bankruptcies.”
If the circumstances surrounding your financial issues deal specifically with being an owner of an incorporated business or a farmer in Ohio, seek the assistance of an attorney who practices in Chapter 11 or Chapter 12 bankruptcy.
