In today’s economy, many people are unable to meet all of their financial responsibilities. Debt can get out of control, especially when unexpected circumstances arise. There are a variety of options available for people who are completely overwhelmed by debt, such as refinancing, debt management plans or some form of bankruptcy, including the filing of a Chapter 7. The filing of a Chapter 7 bankruptcy is available to those who meet certain requirements.
You must pass a ‘means test’ to qualify for a Chapter 7 bankruptcy. The ‘means test’ is a comparison of expenses with your current monthly income. Your current monthly income should be below the state median family income for a family of the same size. However, we can look for certain deductions to decrease your income if you are close to qualifying. We will need the last six months pay stubs to determine your current income.
The state median income in Ohio is based on the number of people in your household. Your income must be below these amounts to qualify for a Chapter 7. *Certain deductions may reduce your income even where your earnings exceed these amounts.
$42,814 for one individual
$53,218 for two
$60, 960 for three
$74,270 for four
If you have received a discharge in a Chapter 7 within the last 8 years, or received a discharge in a Chapter 13 within the last 6 years, a Chapter 7 is not an option for you. The filing of a Chapter 13 is still available if either of these apply.
Participation in a government approved credit counseling course is mandatory under bankruptcy laws. The first course must be completed prior to the filing of your petition. A second and final course must be completed prior to discharge.
Chapter 7 bankruptcy offers people a fresh start because it eliminates the majority of unsecured debt. This type of bankruptcy is a great solution for individuals who have a limited income and cannot support themselves while repaying their debt. While the entire process takes three to five months to receive a discharge of your debt, your petition can be filed almost immediately. Upon the filing of the petition, creditors can no longer attempt to collect on a debt or garnish your wages. This means no more annoying phone calls and the chance to start new.