filing chapter 7 bankruptcy in ohio

7/27/2019 Filing Chapter 7 Bankruptcy in Ohio

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FILING

IN OHIO

CHAPTER 7BANKRUPTCY

THENEEDLEMANLAWOFFICE

SCOTT R. NEEDLEMANBANKRUPTCY AND FORECLOSURE DEFENSE ATTORNEY


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ing Chapter 7 Bankruptcy in Ohio thecolumbusbankruptcylawyer.com

The recent recession in the United States caused many hard-working

individuals and families to face insurmountable financial problems. If you

are among those people, filing for bankruptcy protection may be your best

option. If you are like most people, the decision to file bankruptcy is not

one that will be reached easily; however, once you understand how

bankruptcy works as well as the long-term consequences of filing for

bankruptcy you may find that making the decision is a little easier.

OVERVIEW OF BANKRUPTCY CHAPTERS

Your ability to file for bankruptcy

protection comes from the U.S.

Bankruptcy Code. Bankruptcy,

therefore, is governed by federal law.

Because bankruptcy falls within the

jurisdiction of federal law, the rules

and procedures are the same for

everyone regardless of their state of

residencewith one exception. Individual states have the option to use the

federal exemptions for state residents or implement their own exemptions.

An individual may file for protection under chapters 7, 11, 12, and 13 of

the Bankruptcy Code. Although an individual may file under chapter 11, it

is usually used by small businesses. Chapter 12 is limited to family farmers

and fishermen. Most individuals, therefore, file under chapter 7 or 13.

WHAT IS A CHAPTER 7BANKRUPTCY?

A chapter 7 bankruptcy is often referred to as a liquidation bankruptcybecause a debtor must liquidate all non-exempt assets to pay off creditors

during the bankruptcy. For this reason, debtors who own valuable non-

exempt assets typically decide to file a chapter 13 reorganization or

wage-earners bankruptcy instead of a chapter 7 bankruptcy.


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Along with a consideration of assets, a debtor must pass the means test

to be eligible to file a chapter 7 bankruptcy. The means test looks at a

debtors monthly income compared to other similar households in Ohio as

well as the debts the debtor has to

determine if the debtor is able to

repay them if given an extended

period of time to do so. If a debtor

does not pass the means test, he or

she will need to file under chapter 13

of the U.S. Bankruptcy Code.

A chapter 7 bankruptcy is the simplest

of all bankruptcies. All non-exemptassets are sold (though there typically

are no non-exempt assets) and the

funds earned from the sale used to

pay creditors. All remaining debts that can be discharged are then

discharged, or forgiven.

WHAT IS THE PROCESS FOR A CHAPTER 7

BANKRUPTCY?

A typical chapter 7 bankruptcy will only take four to six months to

complete. The steps required for a typical chapter 7 bankruptcy include:

1. Credit counseling. The first step is to complete the required creditcounseling course from an approved provider. This can be

accomplished online for a fee of around $50.

2. Filing the petition. Next you must prepare and file a petition andall additional schedules and paperwork with the appropriate U.S.

Bankruptcy Court. You will need a number of documents to complete

the initial paperwork such as your tax returns, proof of income and a

list of all creditors.

Filing for Chapter 7

bankruptcy can be a

powerful tool for dealing

with overwhelming debt.

But it isn't available to

everyone.


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3.AutomaticStay. When your petition is filed the court will enter anautomatic stay. This order protects you by ordering all creditors to

cease any attempts to collect on debts, including foreclosure

proceedings, eviction, and garnishment.

4.Assignmentoftrustee. After the original petition is filed, the courtwill assign a trustee to your case. This is the person who will oversee

your bankruptcy.

5. Meeting of creditors. The court will notify all creditors that youhave filed for bankruptcy protection. A meeting of creditors is then

scheduled. You will need to attend this meeting; however, it is not

usually held in a courtroom. Instead, the meeting is typically held at

the trustees office. At the meeting, creditors are given the

opportunity to question you regarding your income and ability to

repay your debts. In a chapter 7 bankruptcy it is not unusual for

creditors to not attend the meeting if they believe it is clear from

your petition that you cannot repay your debts.

6. Sale of assets. If you have any non-exempt assets that can be soldthe trustee will effectuate the sale and use the proceeds to pay

creditors.

7. Secured debts. If you own a home or vehicle that is used assecurity on a loan, you will need to re-affirm the loan with the

creditor if you plan on keeping the asset.

8. Debtor education course. You must also complete a debtoreducation course prior to discharge.

9. Discharge. The court will schedule a discharge date. At this point,all debt that was not re-affirmed will be discharged unless is falls into

a category of debts that cannot be discharged.

WHAT ARE EXEMPT ASSETS IN OHIO?

As mentioned previously, the individual states decide whether the federal

exemptions will be used or state exemptions when a debtor files for

bankruptcy. Although some states allow you to choose between the federal


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and state exemptions, Ohio does not. Some of the more commonly used

Ohio exemptions as of 2013 include:

Homesteadin 2013 Ohio significantly increased the homesteadexemption to $132,900.

Personalproperty$450 of cash on hand or deposited in a bankaccount. $3,675 in a vehicle. $12,250 in household goods with a

$575 limit on an individual item.

Child/Spousal supportto the extent reasonably necessary forsupport.

Tools of the trade$2,325 in implements, books, and tools ofyour trade, occupation, or business.

Wildcard-- $1,225 in any property.WHAT DEBTS CANNOT BE DISCHARGED IN A CHAPTER

7BANKRUPTCY?

Although most debts can be discharged

in a chapter 7 bankruptcy there are some

debts that are not dischargeable under

the U.S. Bankruptcy Code. The most

common debts that cannot be discharged

include:

Certain types of tax claims or past-due obligations.

Debts not set forth by the debtoron the lists and schedules the

debtor must file with the court,

meaning if you fail to include the

debt it will not be discharged.

Debts for spousal support, childsupport or alimony

Chapter 7 bankruptcy

may make you sacrifice

property, yet not

discharge all your debt. If

you are inclined to file for

Chapter 7 bankruptcy,

take a moment to decide

whether it makeseconomic sense.


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Debts for willful and malicious injuries to person or property Debts to governmental units for fines and penalties Debts for most government funded or guaranteed educational loans

or benefit overpayments unless you can prove that having to repay

them would cause an undue hardship.

Debts for personal injury caused by the debtor's operation of a motorvehicle while intoxicated

Debts owed to certain tax-advantaged retirement plans Debts for certain condominium or cooperative housing fees

HOW WILL FILING BANKRUPTCY AFFECT MY CREDIT?

Unfortunately there is no simple answer that this question. Although a

chapter 7 bankruptcy will

remain on your credit report

for ten years, if may not

negatively impact your credit

rating for anywhere near that

length of time. Most debtors

who file a chapter 7

bankruptcy already have a

credit score that is less than

stellar. Often, your credit

score will actually improve as

soon as the bankruptcy is discharged because your debt to income ratio

has improved dramatically. If you have a steady source of income, some

lenders will consider you a good credit risk as soon as the bankruptcy is

complete because they know you cannot file bankruptcy again for at least

eight years. Obtaining a mortgage loan after filing a chapter 7 bankruptcy

though will usually take a minimum of 18 months and likely closer to two

years or more. Your post-bankruptcy efforts to improve your credit rating

will go a long way toward determining the impact the bankruptcy has on

your credit score and your ability to obtain financing.


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ing Chapter 7 Bankruptcy in Ohio thecolumbusbankruptcylawyer com

For a debtor who is struggling to pay bills every month, yet continuing to

fall farther behind, filing for protection through a chapter 7 bankruptcy may

be the answer.

United States Courts,Liquidation Under the Bankruptcy Code

United States Courts,Discharge Under Bankruptcy

NOLO,Ohio Bankruptcy Exemptions

About the Author

Scott R. Needleman

Every associate at The Needleman Law Office is committed to handling your case in both

personal fashion and in a professional manner. In other words, we treat you the way we

would want to be treated. We will take a personal interest in your situation, making sure

you understand exactly what is happening and what options you may have. Then well fig

to ensure the best possible outcome for your situation.

The Needleman Law Office5300 E. Main, Suite 109Columbus, OH 43213614-575-1188

http://thecolumbusbankruptcylawyer.com/
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