Chapter 7 Bankrupcty
Do I Qualify for Chapter 7 Bankruptcy?
Filing for Chapter 7 bankruptcy in Ohio is governed by the United States Bankruptcy Code. Chapter 7 bankruptcy is designed to give you a fresh start, free from the harassment of debt collectors. Under Chapter 7, most unsecured debts are completely eliminated. A few examples of unsecured debts are past due medical, credit card and utility bills, business debts, pay day loans, certain unpaid taxes, and repossession deficiency balances. Sometimes the goal is to stop a wage or bank garnishments or halt a foreclosure proceeding.
Regardless of what is causing your financial pain, Chapter 7 bankruptcy can be a wise financial decision. Over 16,000 Chapter 7 cases were filed in Northern District of Ohio in 2019 alone. That is a large number of people who now have availed themselves of the benefits of bankruptcy. Some worry that all of your possession are sold in a bankruptcy and you loose everything. That is just not case. In fact, there are Ohio and Federal exemptions in the bankruptcy code that actually protect your assets. A knowledgeable attorney can help you avail yourself of the general exemptions.
I would be happy to discuss your specific situation, but generally speaking, Chapter 7 is reserved for those individuals who's income doesn't leave any disposable income to pay any of their bills after paying their basic living expenses (you don't need a job to file for Chapter 7). As a rule of thumb, the bankruptcy code uses the median income in your county to make an initial determination of whether you qualify. In Summit County, where my practice is located, the median income of a family of 4 is $92,239.00. Thus, if your family of 4 has a total income below the median income, you will likely pass the "means " test. Even if your total income is greater than the median income, you may still qualify, so be sure to consult a bankruptcy attorney like myself to discuss your situation.
What is the Process for a Chapter 7 Bankruptcy
With the assistance of bankruptcy attorney, Chapter 7 can be a simple process.
- Take the Required Credit Counseling Course (before you file) - You can do this online in the comfort of your own home. Your attorney can help you find an appropriate course.
- Collect the Documents Required by Your Attorney (before you file) - I provide my client's with a simple checklist for this.
- File the Case - Relief... this is when the "automatic stay" kicks-in which stops garnishments and stops creditors from harassing you.
- Meeting of Creditors (about 45 days after you file) - The name is a little scary, but almost 100% of the time creditors don't show up to this meeting because they are not entitled to receive anything. What will happen is that you will meet with a trustee who will examine you under oath about your finances. This usually takes about 5-10 minutes.
- Take the Required Financial Management Course (within 60 days of the Meeting of Creditors) - In Akron, you can do this online or via the telephone in the comfort of your own home in Akron. Your attorney can help you find an appropriate course.
- DISCHARGE (About 60-90 days after the Meeting of Creditors) - Take a deep breath. Once you receive your discharge your dischargable debts are eliminated and you can get on with life.
