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Chapter 7 Bankruptcy Attorneys in Akron, Canton, Cleveland, and Youngstown Ohio

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is often referred to as “liquidation” because nonexempt property can be sold to reimburse creditors. But the majority of debt is often discharged, or canceled, giving the debtor a chance to start fresh and rebuild finances. Chapter 7 bankruptcy is the simplest, most affordable, and most common type of bankruptcy filing and was designed to relieve overwhelming personal debt.

Who Can File for Chapter 7?

Individuals. Chapter 7 is available for individual debtors who pass the means test, which points to a lack of adequate disposable income needed to repay debts. If bills and normal living expenses make debt repayment a struggle, chapter 7 bankruptcy can be a solution. If a debtor fails the means test, chapter 13 bankruptcy could be a better option.

Small businesses. Chapter 7 bankruptcy is most commonly filed by individuals, but in the case of a sole proprietorship, the court could see the debtor and their business as one. For other business entities, like partnerships, a chapter 7 filing would sell off assets, use proceeds to pay creditors, and the business would wind down. The entire business could also be sold outright and the proceeds would pay down debt. For larger corporations looking to pay off debt but remain open, chapter 11 is the more viable option.

A Chapter 7 Bankruptcy can help you if:
You have more than $10,000 of unsecured debt
You are unable to both keep up with payments and make ends meet
You are being threatened with wage garnishment or a lawsuit because of debt
You are looking for quick debt erasure without a lengthy repayment schedule

How Does Chapter 7 Bankruptcy Work?

COUNSELING. Credit counseling courses can help to determine if the situation calls for bankruptcy, or if another financial strategy could work. Even if it’s obvious that bankruptcy is the only way forward, the court requires these brief courses. We can help debtors to find an approved credit counseling agency and work out any fees. This course must be completed prior to filing a petition with the court.

FILING A PETITION. A petition must be filed in bankruptcy court to begin proceedings. A detailed record of expenses and income will need to be provided using pay stubs, bank statements, and tax returns. All personal property and assets must also be recorded. A thorough list of creditors should be included so the courts can notify them of the bankruptcy case.

AUTOMATIC STAY. As is the case with other bankruptcy chapters, an automatic stay goes into effect once the petition is filed. Creditors are then prohibited from pursuing the debtor for payments, evictions or foreclosures, a collections trial, bank levies, property seizures, and other collection processes. An automatic stay provides the debtor with breathing room and allows time for a dischargement plan to be devised.

341 MEETING. The court will appoint a trustee who will manage any non-exempt asset liquidation and subsequent debt repayment to creditors. They will conduct a meeting with the debtor and creditors where questions will be asked about the debtor’s financial situation. This meeting is a required part of any chapter 7 bankruptcy filing.

SECURED DEBT. If as part of a chapter 7 bankruptcy petition a debtor opts to return a vehicle or other collateral to a lender, it must be done before the case is closed.

FINANCIAL MANAGEMENT COURSE. Also called the “predischarge debtor education course,” this requirement holds for all individuals filing chapter 7 bankruptcy, excepting a few rare circumstances. This financial course teaches debtors to better manage finances, how to use credit wisely after bankruptcy, and how to deal with unexpected financial crises in the future.

DEBT DISCHARGE. If all goes well – and it generally does – the presiding judge will discharge qualified debts and a debtor will be left without any responsibility or legal obligation to pay them.

Consult with an Akron Canton Bankruptcy Attorney

If you find yourself surrounded by large debts, chapter 7 bankruptcy might be the quickest and most practical option to free you from it. That said, you’ll want to hire a reputable bankruptcy attorney so that your case is processed smoothly from start to finish. At Hausen Law, LLC we are nationally known and experienced bankruptcy attorneys. James F. Hausen has handled over 2,000 cases.

We understand that this is a difficult time – we offer extremely competitive fees and are willing to develop a special fee arrangement if need be. Feel free to give us a call to inquire, commitment free, and we can discuss our flexible repayment options.

Contact Northeast Ohio Bankruptcy Attorneys today to set up a free consultation to determine if a chapter 7 bankruptcy is the best course of action for you. We proudly serve the Akron and Canton communities and are here to help.

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