What Actually Is A Chapter 7 Bankruptcy?

Chapter 7 is considered a complete bankruptcy; a fresh start. It typically does not require the repayment of any debt that is unsecured. You would be required to repay debt tied to a car or a house (if you are keeping them) but any debts like credit cards, medical bills, or anything not attached to the property would be wiped out.

What Is A Chapter 7 Bankruptcy Discharge?

The discharge is the actual event where your debts are deemed no longer a legal obligation to you.

What Debts Are Or Can Be Released By A Chapter 7?

Most unsecured debts, such as personal loans, credit cards, and medical bills are released by a Chapter 7 Bankruptcy. Anything that does not have property attached to it is released, with few exceptions.

What Might Be Some Of Those Exceptions?

One of the most common types of debt not discharged in a bankruptcy is student loans. Those are not discharged unless you can show an undue hardship, which is a very difficult standard to meet. Other debts that are not discharged are domestic support obligations (spousal or child support), and taxes that became due within the last three years. Also, any type of secured debt that you are trying to keep, such as a house or a car.

Will I Lose All Of My Property And Assets In A Chapter 7 Bankruptcy?

Most people do not lose any property in a chapter 7 Bankruptcy. They are called “no-asset” cases; meaning there is nothing taken from the individual to pay any of the debt because of exemptions. Exemptions protect property up to a certain dollar amount. For example, if you have equity in your vehicle, in Ohio, there is a protection of $3,775, which is usually high enough for most people, because most people have a lien on the car and owe as much as the vehicle is worth.

Can I Keep Any Of My Property In A Chapter 7 Bankruptcy Without Paying Off A Creditor?

If the creditor has a lien, you would not be able to keep the property unless you pay for it. If a vehicle, for example, has a lien, you would either have to pay the lien holder, or you would have to give the vehicle back. It is the same with a house. If you have a mortgage, you would have to pay the mortgage or you would have to surrender the house. The exception to that would be if you have a lien on a house that was a judgment lien. A judgment lien may be removed through what is called a 522F Motion, a procedure where you ask the bankruptcy court to remove any judgment lien from your house. That is the one exception. Otherwise, you would lose any property that has a lien and you do not pay for. Most pieces of property, though, you do not have any debts on, so you would not lose them. Your furniture, clothes, and personal possessions would not be lost, as you do not owe money on them.

What Are The Requirements To Be Eligible To File For A Chapter 7 Bankruptcy?

First, if you have filed a previous bankruptcy, then you have to wait eight years if it was a Chapter 7 Bankruptcy, or six years if it was a Chapter 13 Bankruptcy. Second, your income will be considered. Depending on your household size, Ohio sets an amount of money that you are allowed to make to still be eligible for a Chapter 7 Bankruptcy. This will be discussed at your first consultation with our office.

How Does Filing A Chapter 7 Bankruptcy Affect Lawsuits Or Any Attachments That Have Already Been Filed Against Me?

A Chapter 7 Bankruptcy immediately stops any type of lawsuit proceedings, including garnishments. Once you file, the individual creditors and the courts involved will be notified that all proceedings must stop instantly.

How Long Does It Take To Go Through A Chapter 7 Bankruptcy?

From the time it is filed, it is typically a four month process to go through a Chapter 7 Bankruptcy. It is six to eight weeks before the hearing(which is called the 341 meeting of creditors although creditors almost never come to the hearing). Then, the judge is required to wait 60 days before the discharge can be entered. Thus, resulting in approximately four months for the process after filing.

For more information on Chapter 7 Bankruptcy In Ohio, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (937) 247-6447 today.