What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is known in general as the “fresh start” or “clean slate” type of bankruptcy. The goal of most people filing is to wipe out their unsecured debt. Examples of these debts are credit cards, medical bills, back utilities, car repossession balances, reinstatement fees to name a few. Another goal in some cases is to stop a wage garnishment or foreclosure proceeding. In 2014, over 18,0000 Chapter 7 cases were filed in Northern Ohio.
In exchange for eliminating these types of debts bankruptcy laws do require people to list and value all
of their property. In some limited cases, property is sold through the Courts and the sale proceeds go to
the creditors listed in the case on an equal basis. Fortunately, there are Ohio exemption laws that
protect property to a generous degree before property can be sold in this matter.
Who Qualifies for Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is meant for people whose household income is at best only covering their basic living
expenses like rent/mortgage, utilities, insurance, food, etc. leaving nothing to pay on their debts without
imposing an undue hardship. In general, if your household income is below the median income for
your county you in all likelihood will qualify. For example, a husband and wife in Summit County
with 2 children would normally qualify for Chapter 7 bankruptcy if their income was below $77,000. It is possible to qualify if
your income is above the median income but this is more complex and you would be encouraged to
speak to myself or another attorney about your particular situation.
What is the Bankruptcy Process and Time Frame?
Once a Chapter 7 is filed your creditors will be notified by the Bankruptcy Clerk’s Office that you have
filed for bankruptcy relief. You will attend a hearing called a “Meeting of Creditors” in roughly 6-8
weeks in which a person known as your trustee will examine you under oath about your finances. The
examination is simply a basic question and answer session about your finances and creditors typically
do not show up. This is not a court setting so you can dress casually if you like. The hearing takes less
than 10 minutes and is nothing to be stressed out about. I will be there with you as well. All you need
to do is tell the truth. After the hearing you must wait 60 days to receive your discharge.
Your Bankruptcy Attorney’s Role
I will make sure before your case is filed that you understand what to expect in your bankruptcy case. I will go
over your paperwork to verify all the information about your assets/ income and list of creditors is
complete and accurate. If filing for Chapter 7 does not make sense due to high income or some other
reason I will let you know before you invest any more time or money into this option. I will assist you
at your hearing and do my best to make sure that everything runs smoothly and is stress free as
possible. I proudly serve clients in Akron and surrounding Northeast Ohio areas.