Toledo Bankruptcy Attorneys

Chapter 7 (Straight Bankruptcy)

Most individuals file under Chapter 7.  Chapter 7 stops wage garnishment and harrassing phone calls from creditors.  It also allows you to get rid of credit card debt, medical bills, deficiencies from mortgage foreclosure or repossession.

In a bankruptcy case under Chapter 7, you file a petition asking the court to discharge your debts.  The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for “exempt” property which the law allows you to keep.  In most cases, all of your property will be exempt.  But property which is not exempt is sold, with the money distributed to creditors.

If you want to keep property like a home or a car and are behind on the mortgage or car loan payments, a chapter 7 case probably will not be the right choice for you.  That is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.

If your income is above the median family income in your state, you may have to file a chapter 13 case (the national median family income for a family of four in 2006 was approximately $65,796--your state’s figures may be higher or lower).  Higher-income consumers must fill out “means test” forms requiring detailed information about their income and expenses.  If the forms show, based on standards in the law, that they have a certain amount left over that could be paid to unsecured creditors, the bankruptcy court may decide that they cannot file a chapter 7 case, unless there are special extenuating circumstances.

DISCLAIMER:  Information adapted from NCLC. The summary explanations above are for general informational purposes only and are not intended as legal advice. No attorney-client relationship is created herein. Each situation is different and specific legal advice should be sought.

Toledo, Ohio bankruptcy attorney Scott Ciolek provides counsel to people in Toledo, Maumee, Bowling Green, Sylvania, Oregon, Perrysburg, Port Clinton, Sandusky, Wauseon, Lucas County, Wood County, Ottawa County, Fulton County, and surrounding communities.