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Chapter 7 Bankruptcy Attorney in Columbus, Ohio
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Chapter 7 can deliver debt relief faster than other debt management methods. LHA can helps you decide what’s best in a difficult situation.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is often called “liquidation bankruptcy.” It allows consumers to completely eliminate most or all of their debt by selling (liquidating) nonexempt property and distributing proceeds to creditors. You may be able to keep exempt property like a house and car. Chapter 7 bankruptcy also discharges (or eliminates) most debt.
Topics we’ll cover in this video:
- What is Chapter 7 bankruptcy?
- How much does a bankruptcy cost?
- What should I expect after a bankruptcy?
- Is bankruptcy on public record?
Debts Included in a Chapter & Bankruptcy
You can eliminate many if not all of your debts through a Chapter 7 filing. This includes:
- Credit card debt
- Personal loans
- Medical bills
- Mortgage (unless you want to keep your home)
- Auto loans (unless you want to keep your car)
Other forms of unsecured debt are also likely eligible to be eliminated without repayment through Chapter 7 bankruptcy discharge. If you think chapter 7 bankruptcy may benefit your financial situation, a lawyer can answer any questions and help weigh your options.
Not Just Any Debt Attorney
As a leader in consumer law, Jeremiah E. Heck is committed to looking out for his clients and focuses on finding the best option for their specific financial situation.
How Long Does Chapter Take?
Chapter 7 bankruptcy could take four to six months, and is generally faster than other types of bankruptcy. Once you identify all your creditors and bankruptcy is approved, your debts are wiped out.
Chapter 7 vs. Chapter 13
Both are personal consumer bankruptcies for individuals. However, there are some critical differences.
Chapter 7 usually takes less time to secure a discharge. It can happen in months, rather than years. Chapter 13 involves a three- to five-year payment plan.
Selling Property & Assets
Chapter 7 requires you to sell or liquidate some of your assets. Chapter 13 allows you to keep everything included in a repayment plan.
You must meet income requirements to qualify for Chapter 7 through a Means Test. Chapter 13 requires you to have enough stable income to make payments.
Chapter 13 has limits on the maximum amount of debt you can include. Currently there is no limit in a Chapter 7.
Chapter 7 Bankruptcy Eligibility
The biggest limitation on Chapter 7 is the “Means Test.,” which considers your income, expenses, and various debts to determine if your disposable income is at or below the median income for your state.
The median household income for a household of one in the State of Ohio is approximately $54,877.00, according to the U.S. Census Bureau. If your income falls below that amount, you will likely qualify to file Chapter 7 bankruptcy. Even if you earn more, you may be able to deduct certain expenses so that you can still qualify.
Limitations on Debt
Another limitation of Chapter 7 bankruptcy is the types of debt that can be discharged. Although Chapter 7 lets you to eliminate most or all of your debt through discharge, you may have to sell some assets to repay creditors. Other debts may not be dischargeable at all.
Debts that are generally not able to be discharged include the following:
- Child support
- Alimony or spousal support
- Tax liens and tax debt (unless it is very old)
- Court fees and penalties
- Personal injury debts incurred due to a DUI
- Debts due to fraud
- Student loans (unless you can prove hardship)
Bankruptcy is Public Record
All types of bankruptcy are filed in federal court, which publishes information in public databases. Your personal financial information will not be open to the public; however, if someone searches for your name in a U.S. Bankruptcy Court database, it will reveal that you have filed for Chapter.
Bankruptcy And Your Credit Score
A Chapter 7 bankruptcy will be listed on your credit report for up to 10 years. However, wiping your financial slate clean with bankruptcy can eventually repair damage from late payments, collections, and repossessions. In time, people who claim Chapter 7 bankruptcy can build a better credit rating.
Can I Buy a Home or Car After Chapter 7?
Bankruptcy does not mean that you will never be able to get a mortgage again. Although creditors will consider your bankruptcy when deciding whether or not to give you a home loan or car loan, you will eventually be able to rebuild of your credit. You may have to wait a few years or show consistent rebuilding of your credit, but lenders will extend financing to you again.
Protection Under Chapter 7 Bankruptcy
Filing for Chapter 7 bankruptcy will still place and automatically stay on the debt related legal actions and stop things like wage garnishment, but lenders may file a Motion for Relief from the Automatic Stay. This would allow them to go back to state court and resume the foreclosure.
The Chapter 7 Bankruptcy Process
The first step should always be to contact a Chapter 7 bankruptcy lawyer to help you navigate the process.
Gather Financial Documents
Before you file, you will need to have all of your financial documents ready. When you visit your lawyer, they will make copies of the documents and return the originals to you.
Some of the documents you will need include:
- Paycheck stubs for the last six months
- Information about additional income over the previous six months
- State and federal tax returns for the previous four years
- Bank statements for the last four months
- Bills showing account numbers and creditor addresses
- Vehicle titles
- Driver’s license
- Social security card
- Life insurance policy declaration pages
- Retirement account statements
- Lawsuits filed against you, including foreclosures and garnishments
- Divorce or dissolution agreement if your marriage ended in the last eight years
- Child support orders
- Spousal support orders
- Lawsuits or insurance claims involving you within the last four years
- Previous bankruptcy filing documents
- Real estate deeds
Qualifying for Chapter 7 Bankruptcy
The Means Test will ultimately determine if you qualify for Chapter 7. This will require a review of your gross income for the last six months, the number of people in your household, and your expenses.
Pre-Bankruptcy Credit Counseling
Debtors filing Chapter 7 are required to take pre-bankruptcy credit counseling. This is typically an online course about filing for bankruptcy and other debt relief options. It typically costs around $30.00.
Complete & File Bankruptcy Forms
If you decide Chapter 7 is your best choice, you can complete the necessary forms and file them with the appropriate bankruptcy court. Your attorney will review your information and ensure your forms are accurate. Errors could delay a Chapter 7 bankruptcy.
Pay a Chapter 7 Filing Fee
Currently, the filing fee for Chapter 7 in Ohio is $338.00. You may qualify for a fee waiver. Talk to your lawyer to learn about your options.
Send Documents to Your Bankruptcy Trustee
The bankruptcy court will assign a trustee to your case. The bankruptcy trustee handles the administration of your case and might needs specific information or documents. Make sure you meet all deadlines given to you by the court and your trustee.
Attend a Bankruptcy Education Course
In this second bankruptcy education course, you will learn more about basic budgeting and financial management. The course is 60 to 90 minutes long and can be completed online, in person, or via phone. If you are married, your partner must take it too. This course may cost up to $20.00 per person.
Attend a Meeting of the Creditors (341 Meeting)
You must attend at least one court hearing as part of the Chapter 7 bankruptcy process – the Meeting of the Creditors, or 341 Meeting. Your bankruptcy attorney can also attend. Here, your trustee will ask you questions about your debts, assets, and income.
You will have to show your driver’s license and social security card at the Meeting of the Creditors. Your trustee may also as that you submit additional documentation. This hearing is typically brief and creditors rarely attend.
Bankruptcy Finalization & Discharge of Debts
Once you submit all necessary documentation and attend all classes, your case will go to the bankruptcy judge. From there, your bankruptcy is finalized, and your debts are discharged. You will likely walk away debt-free with a clean slate. The entire process usually takes four to six months if you complete everything in a timely manner.
What To Expect After Chapter 7 Bankruptcy
Once your bankruptcy is done, you will not have to pay on your discharged debts any longer. If a creditor continues to contact you, you should tell them your debt has been discharged through bankruptcy and refer them to your Chapter 7 bankruptcy lawyer.
If a creditor contacts you and the debt they are calling about was not included in your bankruptcy, you may still be responsible. Your attorney can help you manage that debt another way.
Why Use a Chapter 7 Bankruptcy Lawyer
If you are overwhelmed with debt, Chapter 7 may be the answer. LHA can help you move through the process as smoothly as possible.
Know Your Options
Chapter 7 bankruptcy is just one of the paths that you could take. Talk to your attorney to see if there are other non-bankruptcy options to resolve your debt issues.
Protect Your Rights
Even though you owe creditors money, they must respect your rights under the U.S. bankruptcy code and consumer rights laws. LHA will ensure you are not mistreated.
Plan for the Future
Chapter 7 is a good option if you have a significant amount of unsecured debt. But, it will affect you for years. Let us handle the documents, and represent your interests during and after bankruptcy.