People in Ohio who are struggling with debt might wonder whether they should file for Chapter 7 bankruptcy. Chapter 7 is for people who would not be able to repay the debts through a payment plan, which is the process under Chapter 13. Chapter 7 allows a person to discharge most types of debt, but there are certain guidelines for qualifying.
In most cases, people filing for Chapter 7 must pass the means test, meaning that their income must below the state median. A person who had a Chapter 7 bankruptcy discharged in the past eight years is not permitted to file another one. If the person filed a Chapter 13 bankruptcy, it must have been discharged more than six years ago. There must also not have been a bankruptcy dismissal in the past 180 days for reasons that include requesting a dismissal because of a creditor’s request to remove the automatic stay, abusive or fraudulent use of the system, or violation of a court order.
Undergoing credit counseling that includes two hours of financial management is another requirement. For people who are unable to afford these courses, they may be offered at a lower cost or even for free. Individuals may want to start the bankruptcy process by consulting an attorney to discuss their options and eligibility.
An attorney may also be able to assist in preparing the bankruptcy paperwork and filing it with the court. Bankruptcy filings can be complex, and errors may cause delays. Once the bankruptcy filing has been made, all actions by creditors must cease. This includes creditor phone calls, attempts to collect and lawsuits. A few types of debts, such as taxes and most student loans, are not easily discharged in bankruptcy. However, overall, bankruptcy offers a fresh financial start.