Filing for Chapter 7 bankruptcy is a significant decision, and for many, it can be the start of a much-needed financial reset. If you’re overwhelmed by debt, constantly fielding calls from creditors, or unsure of how you’ll manage your monthly bills, you may already be considering bankruptcy as an option. Chapter 7, also known as “liquidation bankruptcy,” is designed to eliminate unsecured debts like credit cards and medical bills, giving individuals and families a fresh start. While it can feel like an intimidating process, understanding the basic steps involved is a great start. Continue reading and reach out to the knowledgeable Chapter 7 bankruptcy lawyers here at Cousino & Weinzimmer to learn more. Here are some of the questions you may have:
Is Chapter 7 Bankruptcy Right for Me?
Before filing, the first and perhaps most important step is determining whether Chapter 7 is the appropriate type of bankruptcy for your situation. Not everyone qualifies. In Ohio, you’ll need to pass the means test, which compares your income to the median income for a household of your size in the state. If your income is too high, you may need to consider Chapter 13 instead. During an initial consultation, your attorney will evaluate your income, assets, and debts to determine eligibility. It’s crucial to disclose everything fully and honestly, even if it feels uncomfortable. Your attorney is not there to judge–they’re there to help you regain control.
What Happens Once I Decide to File?
After determining eligibility, the next step is gathering your financial documents. This includes pay stubs, tax returns, bank statements, and a list of all debts and assets. Once your attorney has this information, they will prepare and file your bankruptcy petition with the U.S. Bankruptcy Court for the Southern or Northern District of Ohio, depending on your county. At that moment, something very important happens: an automatic stay goes into effect. This court order immediately halts most collection efforts, meaning creditors can no longer garnish your wages, repossess property, or pursue lawsuits.
You’ll also be required to complete a credit counseling course from an approved agency before filing. It’s a straightforward course designed to help you understand your financial options, and it must be completed within 180 days prior to filing. After your petition is submitted, the court will assign a bankruptcy trustee to your case. This trustee is responsible for reviewing your paperwork and managing any non-exempt assets that may be sold to repay creditors.
What Should I Expect After Filing?
Roughly a month after filing, you’ll attend a 341 meeting, also known as the meeting of creditors. It’s usually quick and informal. While creditors are allowed to attend, most of the time they don’t. The trustee will ask you a few questions to verify the information in your petition. As long as you’ve been honest and thorough, there’s usually nothing to worry about.
If there are no objections and you’ve completed a second required financial management course, you’ll receive a discharge of your eligible debts typically within 60 to 90 days after the 341 meeting. From there, you can begin rebuilding your credit and moving toward a more stable financial future.
Chapter 7 may feel like a last resort, but for many, it’s the first step toward peace of mind. If you’re unsure where to start, simply contact Cousino & Weinzimmer for advice today.
