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.