Chapter 7 Bankruptcy in Northeast Ohio

Chapter 7 Bankruptcy

What is a chapter 7 bankruptcy? 

Chapter 7 is one type of “consumer” bankruptcy. Consumer bankruptcy is defined as your debts being from personal accounts vs. business accounts or business debt. Chapter 7 is the most common type of bankruptcy. It is also a “liquidation” bankruptcy. This means that any asset that you own with a value in excess of what you owe on any loan or lien against it and any applicable equity exemption would have to be liquidated and used to pay your creditors. 

For example, if you own a car and it is valued at $10,000.00 but you have a loan against it for $5000.00, you have $5000.00 in equity (value that exceeds the lien). In Ohio, you can currently exempt $4000.00 per one automobile owned per person. Therefore, you would have $1000.00 that you would have to pay to the court to be paid to your creditors. It is important to discuss your assets and debts thoroughly with your bankruptcy attorney, so that you can create a plan to protect as much equity as possible. 

  • You have debt but your credit score is still good. 
  • You have debt, a falling credit score and you are starting to get calls from your creditors. 
  • You have debt, a falling credit score and you are starting to be sued by your creditors. 
  • You have debt, a fallen credit score, a judgment against you and you are getting garnished.
  • You got into a car loan that you could afford. 
  • Your house is in foreclosure and you cannot afford to keep it. 
  • You cosigned on a loan for a friend or family member and are left “holding the bag” for a loan that they are not paying. 

These are all reasons to consider a Northeast Ohio chapter 7 bankruptcy.

Speak to an experienced bankruptcy attorney today!

How can bankruptcy help me? 

It can eliminate the debts, phone calls, and collection efforts. A chapter 7 bankruptcy will eliminate nearly all the consumer debt that you have accumulated. This includes your credit card, medical and other “unsecured” debt. Unsecured debt is debt that is not attached to an asset through a lien or mortgage. 

It will eliminate your obligation to pay on secured debt. This means that it will discharge the obligation to pay on the promise to pay on the loan that you took to buy a car or house. However, it will not remove the lien or mortgage.Therefore, if you do not continue to make the payments due on the lien or mortgage, the creditor will repossess or foreclose on the item used to secure the loan. 

An example is if you have a loan to buy a car and that attaches the promises to pay to the car or house or other item used as security for the loan.  You can no longer make the payments and you file a chapter 7 bankruptcy you are no longer liable to make the payments, but if you do not, the bank will repossess the car. 

If you are a co-signer on a vehicle or other asset and the person who holds title to the asset is not paying, your obligation as cosigner will be discharged in the bankruptcy. Therefore, when the bank repossesses the asset, you will have no liability for the loan. Chapter 7 will stop lawsuits and garnishments against you. This means that if your creditors have started a lawsuit, achieved a judgment or started garnishing your wages, the filing will stop the process. 

If the debt is discharged in bankruptcy, the judgment (provided it has not attached to an asset you own), the lawsuit and the garnishment will all “go away” as a result of the discharge received. This means that barring certain debts (some taxes, child support and spousal support) that are not dischargeable in a chapter 7 bankruptcy, you will exit the process with a fresh financial start. 

Who should file a Chapter 7 bankruptcy?

  • If you are struggling to make ends meet. 
  • If you are stuck with debts as a co-signer and the other person is not paying the loan. 
  • If you have had a catastrophic illness and are being financially crippled by the medical debt. 
  • If you have lost a job and can no longer handle your debt. 
  • If you are being harassed at home or work by your creditors. 
  • If you are losing sleep over your debt. 
  • If you are trying to clean up your credit, so you can purchase a major asset in the near future. 

These are all reasons to consult a bankruptcy attorney to discuss your bankruptcy options. 

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We help people file for bankruptcy relief under the Bankruptcy code. The laws governing legal advertising in the state of Ohio require the following statement in any publication of this kind: “THIS IS AN ADVERTISEMENT.” This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.