Chapter 7

Columbus, Ohio Chapter 7 Bankruptcy Attorneys

WHAT IS CHAPTER 7?

Chapter 7 is that section of the bankruptcy law which allows a person to discharge, or eliminate, a substantial portion of his/her debts. Chapter 7 can only be filed once every eight (8) years. Most debts are dischargeable under Chapter 7. However, some debts such as taxes, child support, spousal support and student loans cannot be discharged. The concept behind Chapter 7 is to give a person with substantial debt (which could never be repaid within a reasonable time) the ability to have a “fresh start”.

WHO CAN FILE CHAPTER 7?

Generally, any adult citizen who has lived in a particular judicial district for the past 180 days, who has not received a Chapter 7 discharge in the past eight (8) years, can file for relief. There are a couple of exceptions, but these restrictions rarely apply.

WHAT ARE THE BENEFITS OF CHAPTER 7?

Chapter 7 allows for the discharge, or elimination, of most debts. The purpose of Chapter 7 is to give a person a “fresh start” once debt becomes overbearing and is more than you can reasonably pay. There are many debts which may be discharged: credit cards, medical bills, repossession debt, broken lease debts, unsecured judgments, utility bills, bad check charges, some taxes, etc.

WHAT DEBTS CANNOT BE DISCHARGED?

Basically, most taxes, child/spousal support, student loans, debts involving fraud, deceit or dishonesty, and any debts arising from malicious or tortious conduct.

WILL I HAVE TO GO TO COURT?

Yes. Approximately thirty (30) days from the filing of the case, there will be a hearing which you must attend with your attorney. At this hearing, you will be briefly questioned as to the debts and assets listed in your schedules. You will also be asked to produce documentation to support the information contained in your court papers. In most cases, you will then simply receive your Chapter 7 discharge of debt within the next 30-45 days.

WILL CHAPTER 7 STOP A FORECLOSURE ACTION?

Short-term – yes, but ultimately Chapter 7, in most cases, will not save your home. If the mortgage is behind, or in default, the lender will eventually obtain permission from the Court to reactivate the foreclosure case after it has been temporarily halted by the Chapter 7 filing. However, if the mortgage is current, or can be made current, and there is little or no equity in the home, it may be possible to “reaffirm” the debt with the mortgage company. This will allow you to keep the property. Each case is fact-specific, and an experienced professional should be consulted.

WILL I LOSE MY CAR OR OTHER PROPERTY IN CHAPTER 7?

The value of an automobile or other personal property will determine whether it can be retained in a Chapter 7 case. Under Ohio law, every person may exempt (or shield from the reach of creditors) a certain amount of equity in a vehicle, and any other personal property. If the account with the creditor is substantially current, and the value of the asset does not greatly exceed the allowed exemption amount, it is likely that an agreement can be reached with the creditor so that you may retain this property.

WHAT IS THE EFFECT OF A CHAPTER 7 DISCHARGE?

Once all legal requirements have been met in your case, the Court will issue an order discharging all debts which were properly scheduled, and entitled to discharge. Thus, these debts are forever eliminated, and can never be collected at any point in the future. You will then have the “fresh start” you need.