Filing for Chapter 7 bankruptcy is a big decision.
Filing for Chapter 7 bankruptcy is a big decision that can feel overwhelming. You’re not alone. The Minnillo Law Group has a team of experienced Chapter 7 attorneys who will guide you through the bankruptcy process in Cincinnati and Northern Kentucky and help you get back on your feet financially.
You may be feeling scared, confused, or embarrassed about your financial situation. We understand what you’re going through and we want to help.
Contact us today for a FREE consultation! We’ll answer all your questions and help you decide if Chapter 7 bankruptcy is right for you.
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Contact Our Cincinnati Chapter 7 Attorneys Today
If you’re struggling with debt in Cincinnati or Northern Kentucky and don’t know where to turn, Minnillo Law Group is here for you and ready to help. We have a team of experienced Chapter 7 bankruptcy lawyers who will help you understand the different types of bankruptcy and clearly explain your options. Contact us today for a FREE consultation to discuss your financial situation by calling us at 513-723-1600.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is a type of bankruptcy that allows people to discharge their debts. In order to qualify for Chapter 7, people must pass a “means test.” This test looks at your income and expenses to see if you have any disposable income. If you do have disposable income, you may not be able to file for Chapter 7. Instead, you may have to file for Chapter 13 bankruptcy.
Chapter 7 bankruptcy is also sometimes called “liquidation bankruptcy” because in some cases, people may have to sell their assets in order to pay off their debts. However, there are many exemptions that allow people to keep certain assets, such as their home or their car. If you’re considering filing for bankruptcy, it’s important to talk to an experienced Chapter 7 attorney to find out what type of bankruptcy is right for you.
Chapter 7 Frequently Asked Questions
At Minnillo Law Group, we help people in the Cincinnati area get debt relief and a fresh financial start. Our law firm takes an informative approach to its work, by educating clients about the bankruptcy system and available debt relief options. Here are brief answers to some common Chapter 7 bankruptcy questions.
If you find yourself in a bad financial situation, it never hurts to learn more about Chapter 7 bankruptcy. While you may never go down this path, it could be the strategy you need to get your finances back in order.
Many people gravitate toward Chapter 7 bankruptcy because it provides them with a fresh start. With some of your debts discharged, it’s much easier to get back on track financially.
There are other reasons to file for Chapter 7 bankruptcy, including but not limited to:
- Prevent foreclosure: If you’ve received a foreclosure notice from your mortgage lender, filing for Chapter 7 bankruptcy can stop the process for the time being. This gives you enough time to work things out often while remaining in your home.
- Keep future income: This is in contrast to Chapter 13 bankruptcy in which you must use future income to make payments for three to five years. With Chapter 7 bankruptcy, all of your disposable income is yours to keep.
- No limit on how much debt you can have: This is a big benefit when compared to Chapter 13, as you don’t have to concern yourself with exceeding any debt limit.
- It’s fast: When you’re facing financial trouble, you want to move fast. The Chapter 7 bankruptcy process typically takes anywhere from three to six months, with the discharge of debt often happening within three months.
- Avoid wage garnishment: If you’re concerned about a wage garnishment, the automatic stay protects you from this for the time being. Once again, this allows you to stabilize your finances as you attempt to get back on track.
Filing for Chapter 7 bankruptcy is a big financial decision, but once you compare the pros and cons you’ll feel better about what’s to come. Even if you don’t file right away, the information you gather will help you keep your options open in the future.
If you’re interested in filing for Chapter 7 bankruptcy, organize your finances and then learn more about your legal rights and how to start the process.
Chapter 7 bankruptcy is tremendously helpful when people are struggling under a mountain of debt that they can’t ever hope to pay off. However, not everyone can qualify for Chapter 7 proceedings.
If you’re not sure if you qualify for Chapter 7 bankruptcy in Cincinnati or Northern Kentucky, you might want to review the following common disqualifiers for the process:
1. The filer makes too much money
Bankruptcy filers must pass the “bankruptcy means test” to qualify for Chapter 7. Part of this test involves checking your income during the last six months and comparing it to the state’s median income. If your median income equals or falls below the median income in your state, then you have passed the first part of the bankruptcy means test. If it exceeds the state median, then you need to apply for a different type of bankruptcy.
For example, if you have an average income that exceeds the state’s median income, you might have enough disposable income (after subtracting allowed expenses) to complete a Chapter 13 repayment plan.
2. It hasn’t been long enough since the last bankruptcy
If you have completed a Chapter 7 bankruptcy inside the last eight years or a Chapter 13 bankruptcy inside the last six years, then you’re not eligible to file for Chapter 7. If you file for Chapter 7 anyway, the court will dismiss your application.
3. A court dismissed the filer’s bankruptcy within the last 180 days
Following a bankruptcy dismissal, you might be subject to a 180-day waiting period before filing again. This pause on filing applies to dismissals for the following reasons:
- Court order violations
- Fraudulent bankruptcy filings or actions that were an abuse on the court
- The filer asked for a dismissal when a creditor requested that the court remove the automatic stay
Chapter 7 bankruptcy, which has limitations in place for both the total value of your assets and your income, is also sometimes called liquidation bankruptcy. That is because the courts have the authority to liquidate (or seize and sell) certain assets to repay your creditors prior to your discharge. For that reason, many Cincinnati area homeowners choose not to file Chapter 7 bankruptcy. However, while there are limits to the exemptions available, you do have the right to exempt certain personal property from liquidation in a Chapter 7 bankruptcy.
Those exemptions include a specific amount of your home equity. If you have a large amount of unsecured debt and your income is at or below the Ohio state median, you may qualify for Chapter 7 bankruptcy. Depending on how much equity you have in your home, Chapter 7 proceedings could be the best option available.
Ohio has a specific limit on home equity
The cost of living and standard of living differs throughout the country. As such, the federal government has certain standard exemptions in place, but every state also has the ability to set their own. State exemptions tend to more closely reflect the average household in the area when compared with federal exemptions.
Those filing for bankruptcy have the option to choose either state or federal exemptions, in most cases. In Ohio, however, federal exemptions are not available. Those filing for bankruptcy will need to use the state-specific exemptions, which are quite generous.
For an Ohio house or parcel of real property that serves as your primary residence, you can exempt up to $145,425 in home equity from liquidation. That could represent nearly the full value of your home, depending on the size of the property and the neighborhood where you live.
Free up more income to pay your mortgage
If you have medical debt or major credit card balances, you may find yourself struggling to make minimum payments every month with little hope of light at the end of the proverbial tunnel. Chapter 7 bankruptcy can help you free up more of your monthly income to go toward your mortgage and other standard costs of living expenses instead of paying off interest in fees on your various debts.
Not only can you get rid of some of your debt burden, but you can retain the equity that you have worked so hard to build in your home as a working adult.
When you are drowning in debt, getting constant harassing calls from creditors, you more than likely are tired of being stressed about your finances. You may be losing sleep at night, feeling like you’ll never escape this debt. You might be considering filing bankruptcy. Yet, you don’t know that much about it. Should you seek Chapter 7 bankruptcy or Chapter 13? What is the difference between these two forms of personal bankruptcy?
Chapter 7 bankruptcy basics
About 63% of bankruptcies filed in the United States in 2019 were Chapter 7 debt relief. Some of the reasons Chapter 7 bankruptcies are more popular include the following:
- Chapter 7 wipes out most unsecured debt, including credit card debt and medical debt.
- Chapter 7 takes about four to six months to complete.
- Filing for Chapter 7 stops harassing calls from creditors.
- In Missouri, Chapter 7 allows consumers to keep their home if they have less than $15,000 equity in it. In Kansas, the homestead exemption is for an unlimited amount.
Those seeking Chapter 7 must qualify for a means test (which includes evaluating if your income is below a set limit). A Chapter 7 bankruptcy will remain on your credit for 10 years.
Chapter 13 bankruptcy basics
Those who don’t qualify for a Chapter 7 bankruptcy may file for a Chapter 13 bankruptcy. Chapter 13 bankruptcies come with these advantages:
- You set up a payment plan to pay your creditors.
- Creditors may be flexible about your payments or lower your debt amount.
- Filing for Chapter 13 stops harassing calls from creditors.
- You can keep the property you are paying debt on.
- A Chapter 13 bankruptcy only stays on your credit for seven years.
Consulting an experienced bankruptcy attorney can help you determine what type of bankruptcy to file and if you should consider other debt-relief options.
You cannot file a Chapter 7 again until eight years from the date of your previous filing. On the other hand, you can file a Chapter 13 at any time after your Chapter 7 discharge, though discharge in Chapter 13 may not be granted.
While it is true that Chapter 7 bankruptcy proceedings may sometimes require the liquidation or sale of assets to repay creditors before a discharge, that doesn’t necessarily mean that you will lose your home just because you need debt relief. Quite a few people actually use bankruptcy to protect their status as homeowners by reducing their debt load and preventing aggressive collection tactics.
Homeowners can exempt some property value when they file
The goal of bankruptcy is to help people regain their financial footing, not to put them in a position where they are even worse off than they were when they started.
Losing your home combined with bankruptcy marks on your credit report could make it almost impossible for you to find a new place to live, especially if you want to stay in the same neighborhood or school district.
Thankfully, those who file Chapter 7 proceedings have the right to exempt a certain amount of their home equity from liquidation. Ohio has drastically different property values in different communities, so the amount of equity that you can exempt will depend on the county where you live.
Many Ohio residents outside of urban areas can exempt about $75,000 worth of home equity, although those in the most competitive real estate market and potentially exempt up to $150,000 in equity.
Reviewing your financial situation, including the equity in your home, can help you make more informed decisions about whether Chapter 7 bankruptcy is the right solution for you.
Get Your Chapter 7 Questions Answered for Free
You probably have questions of your own relating specifically to your situation. In a free consultation, a Chapter 7 attorney at one of our Cincinnati firms can answer your questions and explain how they can help you get debt relief. Contact us today to arrange a free initial consultation with a bankruptcy attorney in a no-pressure setting. We have convenient locations near you with offices in Cincinnati, Eastgate, Fairfield, and Dayton.
What can I expect from my Chapter 7 attorney?
If you are considering filing for Chapter 7 bankruptcy, you may be wondering what role an attorney will play in the process. While it is possible to file for bankruptcy without an attorney, it is not recommended. An experienced Chapter 7 attorney can help you navigate the complex bankruptcy process and ensure that all of your paperwork is filed correctly.
Additionally, your attorney can represent you in court and help to protect your interests. If you are facing financial difficulties, a Chapter 7 bankruptcy attorney can provide invaluable assistance and guidance.
At Minnillo Law Group, we will evaluate every aspect of your situation and provide you with a strategic plan to solve your debt problems. If Chapter 7 is the right solution for you, our firm can act immediately to relieve you of all of the burdens and stress that debt can create, including:
We can also help you take steps to restore your credit after bankruptcy.
Can a business file Chapter 7 bankruptcy?
Minnillo Law Group has a successful track record of helping our Cincinnati business clients restore their financial health through Chapter 11 bankruptcy filings, business reorganizations, and through commercial loan workouts without recourse to bankruptcy. However, when these are not viable options, it makes sense to take the Chapter 7 bankruptcy route.
In considering a business Chapter 7 bankruptcy, our attorneys will look for ways to isolate your personal assets from the business assets. Whether it involves an individual or a business Chapter 7 bankruptcy, we will draw on our substantial experience to put you in the strongest financial position possible at the conclusion of the process.
Cincinnati Chapter 7 Bankruptcy Resources
We are a law firm and a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.