Chapter 7 bankruptcy
A fresh start, usually in about four months
Chapter 7 wipes out credit card balances, medical bills, personal loans, and other unsecured debt. Most people who file keep their car, their household goods, and their retirement savings.
Who qualifies
The means test
The means test compares your average income over the last six months to the median income for a household your size in Ohio. If you're under the median, you generally qualify. If you're over, a second calculation looks at your actual expenses to see what you could afford to repay.
Being over the median doesn't rule you out. We run the numbers at your consultation.
What you keep
Ohio exemptions
Ohio law protects certain property from the trustee. The exemptions cover equity in your home up to a set amount, a vehicle up to a set value, household goods, clothing, tools of your trade, and most retirement accounts.
The dollar amounts are adjusted every three years. We check what you own against the current figures before we file.
Timeline
What a Chapter 7 case looks like
Credit counseling
Take an approved course online within 180 days before filing.
Filing day
We file your petition and schedules. The automatic stay stops garnishments, calls, and lawsuits.
Meeting of creditors, about a month in
The trustee asks about your paperwork under oath. It usually takes a few minutes, and we're there with you.
Debtor education
Finish the second course on budgeting. The court needs the certificate before it grants your discharge.
Discharge, about 60 to 90 days later
The court issues an order releasing you from your qualifying debts. Your case closes soon after.
What it covers
What Chapter 7 erases, and what it doesn't
Usually erased
Credit card balances
Medical and hospital bills
Personal loans and payday loans
Past-due utility bills and back rent
Judgments from uninsured car accidents
What's left owing after a repossession or foreclosure
Usually not erased
Child support and spousal support
Most student loans
Recent income taxes
Court fines, penalties and restitution
Debts from fraud, or from injuries caused while driving drunk
If you want to keep a house or car that has a loan on it, you keep paying that loan. Chapter 7 can also let you give the property back and walk away from the balance.
What it costs
How fees work
You'll know what your case costs before you decide anything. Call us and we can give you an estimate over the phone. Once we've met and looked at your situation, we quote you an exact fee.
A few costs don't come to us: the bankruptcy court's filing fee, and the two short courses the law requires, which are usually inexpensive.
In Chapter 7, our fee is generally paid before your case is filed. Ask us about the options when we meet.
Worried you can't afford to file?
The court can let some people pay the filing fee in installments, and can waive it for people with very low incomes. We'll tell you if either applies to you.
Chapter 7 questions
Can I keep my car?
Usually. If your equity is within the Ohio exemption and you're current on the loan, you can sign a reaffirmation agreement and keep paying it.
What about my house?
If your equity is under the homestead exemption and you're current on the mortgage, you can keep the house. If you're behind, Chapter 13 may be the better fit.
How often can I file?
You can receive a Chapter 7 discharge once every eight years.
Will I lose everything?
No. Most people who file Chapter 7 keep everything they own, because Ohio's exemptions protect it. We check what you own against the exemptions before we file.
Do my spouse and I both have to file?
No, but if you both owe a debt and only one of you files, the creditor can still collect the whole amount from the other. When debts are shared, filing together usually gives the best protection.
Will it stop a utility shutoff?
Generally, yes. Filing stops the utility from disconnecting you over the old balance, which can be erased in the case. You keep paying your new monthly bills, and the utility may ask for a deposit.
Can bankruptcy help me get my driver's license back?
If your license was suspended because of an unpaid judgment from an uninsured accident, filing can often help you get it reinstated. Ask us about your situation.
How long will it affect my credit?
A Chapter 7 can stay on your credit report for up to ten years, but that doesn't mean ten years without credit. Many people start rebuilding within a few years, because the debts dragging their score down are gone.
Find out if Chapter 7 fits
We'll run the means test with you at a free consultation.