Chapter 7 Bankruptcy

Chapter 7 Bankruptcy Attorneys Mentor OH

Chapter 7 Bankruptcy

Our Knowledgeable Bankruptcy Lawyers are Committed to Meeting Each Client’s Needs

If you don’t earn much income and you’re struggling to repay your debts on time each month, you may benefit significantly from filing for bankruptcy. Individuals – and married couples who file jointly – that qualify for this form of debt relief can have their eligible unsecured debts discharged without any obligation to make additional payments on those debts first.

Chapter 7 bankruptcy, also known as “straight bankruptcy” or “liquidation bankruptcy”, is one of the most common types of bankruptcy protection for individuals and families in the United States. It is designed to help those who are struggling with debt and cannot afford to repay their creditors. Unlike Chapter 13, which requires debtors to create a repayment plan over three to five years, Chapter 7 provides a faster path to financial freedom. Most cases are resolved within four to six months after filing.

  • Jon Axelrod has represented us on multiple occasions since 2009. He has always gone above and beyond our expectations of a lawyer. He made sure that he gave us more than enough time and attention to make sure we were at ease. Without his help it would have been difficult to make it through some very trying times.

    Robert


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The Benefits of Filing for Bankruptcy

The first benefit of bankruptcy is bestowed upon a filer as soon as they submit a bankruptcy petition to the court. Once a bankruptcy case has been opened, the automatic stay kicks in. This legal protection halts virtually all collections actions, including wage garnishment and even lawsuits. While the automatic stay remains active, creditors cannot request or demand repayment of most debts, nor can they take action to collect repayment.

The automatic stay is one of the strongest protections offered by bankruptcy laws. It immediately stops harassment from debt collectors, prevents foreclosure on your home and repossession of your vehicle, and stops utility disconnections. This relief is essential for our clients in Mentor, Ohio, providing them with breathing space to make decisions about their finances without stress from constant demands from creditors. Many clients report better sleep after receiving this protection.

The second primary benefit of bankruptcy occurs when a case is successfully closed. If a Chapter 7 bankruptcy filer has met all of the requirements of the process, the court will discharge their eligible unsecured debts, including medical bills, payday loans, and outstanding credit card balances. Once those debts are discharged, the filer will never again be required to repay them.

It’s important to understand which debts can and cannot be eliminated through Chapter 7 bankruptcy. Most unsecured debts, such as credit card balances, medical bills, personal loans, and utility bills, can be discharged, but certain obligations typically do not, including student loans, child support, alimony, certain tax debts, and debts incurred through fraudulent activities. Court-ordered fines and restitution are also typically not discharged. Our bankruptcy attorney can review your debt portfolio to determine which obligations will be eliminated and which will remain after bankruptcy.

By freeing up a filer of the crushing weight of debt that likely keeps them up at night, the bankruptcy process can help families to achieve a fresh financial start.

Understanding the Means Test

Before you can file for Chapter 7 bankruptcy, there is a process known as the “means test” that must be completed. This test compares your household income with the median income of households of the same size in Ohio. If your income is below the state’s median, you are automatically eligible for Chapter 7. However, if your income exceeds the median, you may still be eligible if your disposable income (income left after allowable expenses have been deducted) is not sufficient to pay a significant portion of your unsecured debts.

The means test can be a complex process involving numerous calculations and considerations regarding household size, income sources and allowable expenses. Our experienced bankruptcy attorneys have knowledge and expertise to help you understand the requirements of the means test and ensure that all legitimate expenses are correctly documented, so you have the best chance of qualifying for chapter 7 bankruptcy relief.

Why Is It Called “Liquidation” Bankruptcy?

A trustee is assigned to each Chapter 7 bankruptcy case. If a filer owns a lot of luxury property or other valuable non-exempt assets, that trustee is empowered to sell those assets to repay the filer’s creditors. However, very few Chapter 7 filers own any non-exempt assets that are valuable enough that a trustee would be tempted to sell them. As a result, the vast majority of filers keep all of their property after filing for bankruptcy. 

Ohio law provides generous protections for most of the assets that typical families own. These protections include equity in the main residence (homestead exemption), one vehicle per person, household goods and furniture, clothing, trade tools, and retirement accounts, among other items. The key to successful Chapter 7 bankruptcy is careful planning and documentation to ensure all assets are adequately protected by these exemptions. Our experienced bankruptcy attorneys carefully review each client’s assets and ensure they are protected to the maximum extent possible.

What About the Stigma?

If you are hesitant to explore this legal opportunity because you are concerned that there is a stigma attached to it, know that since the Great Recession of 2008, that stigma has all but disappeared in most communities. When the housing and financial markets crashed and the employment rate plummeted as a result, most Americans gained a new appreciation for the reality that sometimes even the most responsible, financially proactive, and hard-working people fall on hard times and need some help through little or no fault of their own.

Today, bankruptcy is widely recognized as a legitimate legal remedy, as was designed. Medical emergencies, job loss, divorce and unexpected major expenses can happen to anyone, regardless of how they manage their finances in the past. Studies show that medical debt contributes to approximately two-thirds of personal bankruptcies, and these circumstances are largely outside an individual’s control. Bankruptcy provides a safety net for hardworking Americans, allowing them to recover and rebuild after difficult times.

  • Jon Axelrod was referred to me by my best Friend. I was a nervous wreck, we had accumulated so much debt due to illness and such. We had no clue how & what to do. We were able to get a complete fresh start and keep our cars and home. We actually have a savings now and have not used a credit card since. Jon walked us through every step and his secretary, Rhonda was unbelievably helpful and patient. I would never hesitate to recommend Jon to anyone with the utmost confidence.

    Amy

The Chapter 7 Bankruptcy Process: What to Expect

Understanding the bankruptcy process can help reduce anxiety and ensure that you are prepared for each step. The process usually begins with a detailed consultation with a bankruptcy lawyer, during which you will discuss your financial situation, review your debts and assets, and determine if Chapter 7 bankruptcy is the best option for you. If you decide to move forward, your lawyer will help you collect the necessary documents, including pay slips, tax returns, bank statements, and a detailed list of your debts, assets, income, and expenses.

Once your bankruptcy petition has been prepared and submitted to the court, an automatic stay will take effect immediately. After approximately four to six weeks from the filing date, you will be required to attend a creditors’ meeting (also known as a 341 meeting). Although the name implies that creditors will attend these meetings, in reality, they rarely do. Instead, you will meet with the bankruptcy trustee assigned to your case. The trustee will ask you questions about your financial situation and the information provided in your bankruptcy petition under oath. Your attorney will be present to assist you during this meeting and prepare you for it beforehand.

Before receiving your discharge, you will also need to complete a debtor education course from an approved provider. This course covers personal financial management and is designed to help you make sound financial decisions in the future. Once you have completed this requirement and the trustee has determined that there are no non-exempt assets to administer, the court will issue your discharge order, typically within 60 to 90 days after the meeting of creditors.

Learn More About Chapter 13 Bankruptcy

Connect with one of our Experienced Lake County, Ohio Bankruptcy Lawyer at No Cost to Learn More

Filing for bankruptcy is not the best way forward under all circumstances. However, each year, hundreds of thousands of Americans benefit from meaningful debt relief via Chapter 7 bankruptcy with good reason.

To learn more about whether filing for Chapter 7 bankruptcy may be a good option for you, schedule a free case evaluation with one of our compassionate and reputable Mentor, OH Chapter 7 bankruptcy lawyers at Axelrod & Hellier Law Office by calling the firm at (440) 944-7300 or submitting a contact form on our website. Because this consultation is risk-free and is offered at no cost, you have nothing to lose – and potentially much to gain – by exploring your options today. We look forward to speaking with you.

Common Chapter 7 Bankruptcy FAQs

What is Chapter 7 bankruptcy and how does it work?

Chapter 7 bankruptcy is a legal process that allows qualifying individuals to discharge (eliminate) most unsecured debts, such as credit card balances, medical bills, and personal loans. The court appoints a trustee to review your case, and if you meet the requirements, your eligible debts are wiped out, providing a financial fresh start.

What is the “automatic stay” and how does it help me?

The automatic stay is a powerful legal protection that goes into effect as soon as your bankruptcy petition is filed. It immediately stops all collection actions, including creditor calls, lawsuits, wage garnishments, and foreclosure proceedings, giving you immediate relief while your case is processed.

Will I lose all of my property if I file for Chapter 7?

No. Ohio law provides “exemptions” that protect essential property, such as a portion of home equity, your vehicle, household goods, and retirement accounts. Most Chapter 7 filers keep all of their property because their assets fall within these protected exemption limits.

How do I know if I qualify for Chapter 7 bankruptcy?

Qualification is primarily based on your income. You must pass the “means test,” which compares your household income to the Ohio median for a similar family size. Our attorneys can evaluate your specific financial situation during a free consultation to determine your eligibility.

What types of debt are NOT discharged in Chapter 7?

Certain debts generally cannot be discharged, including most student loans, recent taxes, child support, alimony, and debts arising from fraud or intentional injury. We can review your debts to clarify which would be eliminated and which would remain.

How long does the Chapter 7 bankruptcy process take?

From filing to discharge, a typical Chapter 7 case takes about 3 to 5 months. The process involves filing a petition, attending a brief meeting with the trustee, and fulfilling a few legal requirements before the court issues the final discharge order.

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