Ever feel like debt has totally overwhelmed you? Many people are completely over their head in debt, and the anxiety causes difficulty breathing. Don't give up hope. You are not alone.
As an experienced Columbus Ohio attorney, I can help you determine if filing bankruptcy is a good choice. As a licensed Ohio attorney, I can guide you through the process and help you achieve a fresh start to your life. Filing bankruptcy is not always the best choice for a situation. If an alternative is better for your situation, I can help you determine that as well.
There are generally 2 types of bankruptcy for the average debtor, a Chapter 7 and Chapter 13. To determine if you qualify for a Chapter 7, the court uses 2 tests for eligibility, the Means Test (or your income relative to the average American median income) and the Totality of the Circumstances Test (or look at the total circumstances to determine your monthly debt to income). The courts also consider a 3rd test called the Special Circumstances Test which looks at circumstances of a situation (like major medical, health, or other factors).
When a person receives a Discharge , the discharge allows the debtor to discharge all underlying contractual obligations on unsecured debts. A Chapter 7 is known as a fresh start because it allows debtor (or the person filing the bankruptcy) the opportunity of a fresh start from the unsecured creditors of credit cards, medical bills, and other types of debt. A Chapter 7 allows the debtor to get rid of or discharge most unsecured debts. A Discharge means that the estate has successfully discharged all unsecured debts that are owed.
When a person files a Chapter 7 Petition, they are protected under federal law by a Federal Stay Order, which stops most lawsuits. If there are pending garnishments or repossessions, the filing of the bankruptcy may stop the collection efforts (except for child support).
A 341 Meeting of Creditors is conducted to evaluate the debtor's situation. The Trustee represents the various creditors of the debtor, and Trustee's Duty is to evaluate all the assets and liabilities of the debtor. A Trustee has the power to Avoid Liens and recover assets on behalf of the estate. The debtor is entitled to a certain amount of protection through exemptions provided by state and federal law. These exemptions allow the debtor to protect some equity in cars, bank accounts, houses, and tax refunds. The Trustee can sell property if there is equity in the property, and they can Distribute the Proceeds to the various creditors according to priority of the claim.
Generally, a federal stay order applies to all unsecured debts. However, some debts are not eliminated in a Chapter 7. The most common non-dischargeable debts are taxes, student loans, child support, and government loans. Any debt created by false pretenses, a false representation, or actual fraud is also not dischargeable. Also, any personal injury caused by a motor vehicle driven by debtor while intoxicated may not be dischargeable. Generally, a creditor needs to bring a non-dischargeable adversary action to assert a debt survives discharge. The exception to bringing an adversary action is child support, taxes, and most student loans.
With automobiles, a Chapter 7 filing may stall out repossession efforts. There is usually a 45 day period after filing where the creditor cannot repossess the car. During that time period, a debtor may be able to work out payment arrangements with a car company. Only a Ch. 13 filing can help catch up on car and house payments. In addition, sometimes a Ch. 13 can "cram down" the amount owed on a car if the car has been owned more than 910 days. A Redemption makes it possible to reduce an existing car loan down to fair market value.
Some Utility Shut-Offs may be stopped for a limited time after filing. The Utility company may request an additional deposit within 20 days of the filing of the petition.
If a Ch. 7 case fails, it is dismissed. Generally, a dismissal is a bad thing. There are various effects of dismissal. One of the major effects is that creditors can go after the debtor and try to collect again against them. The creditor can garnish wages, go after bank accounts, file judgment liens, or suspend driver's licenses in the effort to collect on the debt. Sometimes a case can be converted to another type of bankruptcy.
In my free initial consultation, I assess what is going on with a client and determine if I can help them. My fees are based on the complexity of the case, but I try to competitively price my fees in a reasonable, affordable, and efficient way. Please call me at the following to set up a free initial consultation:
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