Chapter 7 Bankruptcy Lawyer Serving Youngstown, OH
Almost everyone faces financial challenges at some point. If you are feeling overwhelmed by calls from creditors, struggling to make ends meet, or worried about losing everything you’ve worked so hard for, you’re not alone. The good news is that you have options. Chapter 7 is a tool available to you to help you clear your debt, protect your property and begin again with a clean slate.
If you live in Youngstown and are thinking about filing for bankruptcy under Ohio law, talk to the Chapter 7 bankruptcy lawyers at Amourgis & Associates, Attorneys at Law first. Our Youngstown bankruptcy lawyers have extensive experience helping people file for bankruptcy so they can have a brighter financial future. Conveniently located in Canfield, OH, we’re ready to work with you to create a bankruptcy plan that’s personalized to your needs, and we’ll help you at every step of the filing process.
Time is critical when it comes to bankruptcy cases in Youngstown. Get your free initial case review today by calling our office or visiting our contact page.
What Is Chapter 7 Bankruptcy?
Filing for Chapter 7 bankruptcy is sometimes known as a “liquidation bankruptcy.” This process involves selling off all of your non-exempt assets so you can pay back creditors at least a portion of what you owe.
After you’ve filed for Chapter 7 bankruptcy, the bankruptcy court will impose a court order known as a “stay” on your creditors. This order prevents creditors from contacting you about debts. A stay from a bankruptcy court also prevents creditors from taking further legal action against you, such as foreclosing on your home, collecting on existing debts, repossessing your assets, or garnishing your wages and bank accounts.
Once your assets have been liquidated and creditors have been paid with whatever money was generated from those assets, the bankruptcy court will wipe out some or all of your remaining debts. This is also known as “discharging” your debts.
After your debts have been discharged, creditors are no longer able to collect on those debts. There are some debts that cannot be discharged in bankruptcy, however, such as student loan debt and any child support payments that you owe. If you still owe these debts, you will have to find a way to pay those obligations.
How to File Chapter 7 Bankruptcy in Youngstown
Filing for Chapter 7 bankruptcy in Youngstown under Ohio law is a complicated, multi-step process. This is one reason why it’s a good idea to get a bankruptcy lawyer to help you with your case.
Here’s how the filing process works for a Chapter 7 bankruptcy:
- Gather your financial documents – Before you can file for Chapter 7 bankruptcy, you will need to thoroughly document your income, assets, and outstanding debts. This means you’ll need to collect documents such as:
- Your pay stubs from the past several months, or income statements if you own your own business or are self-employed
- Your federal and state tax returns from the past two years
- The deeds and mortgages to your home and any other real estate you own
- The titles and notes for any vehicles you own
- Statements from any bank accounts you have
- Statements from any brokerage accounts or retirement accounts you have
- Documents pertaining to any annuities you have
- Records for any life insurance policies you hold
- Records of any public benefits you receive, such as disability or Social Security benefits.
- Invoices or bills you’ve received that pertain to your debts
- Take a bankruptcy counseling course – State bankruptcy law requires anyone who wishes to file for Chapter 7 bankruptcy to take a bankruptcy counseling course before they can file their petition with the courts. You must include a certificate showing you completed the course with your petition.
- Fill out the bankruptcy petition forms – The next step is to fill out the bankruptcy petition forms required by your local bankruptcy court. Each local court has its own particular forms that you’ll need to fill out, along with the standard petition form. You will need to pay a filing fee when you submit your forms unless your income is less than 150 percent of the federal poverty line.
- Take a second counseling course – After you’ve filled out the forms and filed your petition, you will need to take another bankruptcy and credit counseling course. You must complete this second course before your first court hearing.
- The court appoints a bankruptcy trustee – In Chapter 7 bankruptcy cases, the court will appoint a trustee to oversee your bankruptcy. The trustee may ask for additional documents or other information from you to verify your income and assets. If they notice any discrepancies, they may ask you to submit an amended petition. Once a trustee has been appointed, they will hold at least one hearing before the bankruptcy court. At this hearing, the trustee will confirm the information submitted in your petition and hear any objections from your creditors.
- Liquidation – After any objections from your creditors are satisfied, the bankruptcy trustee will liquidate any non-exempt property or other assets that you have. The proceeds from the sale of these assets will be used to pay off as much of your debts as possible. After the liquidation process is complete, the bankruptcy court will issue an order wiping out any of your debts that can be discharged. It should be noted that there are certain debts that cannot be discharged in Chapter 7 bankruptcy, so be sure to take that into account before you file.
Chapter 7 Exemptions in Youngstown Bankruptcy Cases
Ohio bankruptcy law allows you to keep certain assets when you file for bankruptcy, generally those assets you need to live or that are up to a certain value. These assets are referred to in bankruptcy proceedings as “exempt property.”
Some of the assets that are exempt in Chapter 7 bankruptcy cases include:
- Up to $500 worth of cash on hand or deposited at a bank
- One vehicle worth up to $4,000
- Up to $145,425 in equity in your primary home
- Up to $1,700 worth of jewelry
- Up to 75 percent of your wages
- Household items worth $625 or less per item, with a limit of $13,400 total for all household goods
- Up to $25,175 in personal injury compensation that you’ve received within 12 months of filing for bankruptcy
- Up to $2,550 in property that you use for your job or at your business
- Up to $1,325 in value of any assets that you can add to another exemption or use to keep any property that isn’t otherwise exempt
- The full value of any retirement accounts you have, including pensions, IRAs, and other tax-exempt accounts
- The full value of any public benefits you receive
- The full value of any spousal or child support you receive
- The interest in a burial plot
Chapter 7 Means Test for Bankruptcy in Youngstown, OH
Before you can file for Chapter 7 bankruptcy in Youngstown, you must show that you do not have sufficient means to file for a Chapter 13 reorganization bankruptcy instead. This is known as a “means test.” If the means test shows that your income meets the standards for Chapter 7 bankruptcy, you can go ahead and file.
Here’s how the Chapter 7 means test works:
- Income – The Ohio means test compares your household’s income to the median income of another Ohio household of identical size. If your income level is less than the median for a similar household, you “pass” the means test. To figure out your income, add up any money you receive in wages, income from a business, public benefits, annuities, etc.
- Expenses – If your household income exceeds the median level for the state, the next step is to add up your expenses. This includes your mortgage or rent, the cost of food and transportation, utilities, transportation costs, the cost of health insurance, and any out-of-pocket medical expenses you may have. Once you have your expenses figured out, subtract that total from your monthly income. That’s your disposable income.
- Next steps – If your disposable income is less than a certain threshold set by the state each year, you will qualify to file for Chapter 7 bankruptcy. If your disposable income level is above a certain threshold set by the state each year, you will be ineligible to file for Chapter 7. If your disposable income falls between the two thresholds set by the state, you’ll need to do some additional calculations. If you can pay at least 25 percent of your debts over the next few years, chances are you will not be allowed to file for Chapter 7 bankruptcy.
How a Youngstown Chapter 7 Bankruptcy Attorney Can Help
Because bankruptcy is such a detailed process, be sure you talk to our Youngstown bankruptcy lawyers before filing.
Here are a few ways that our Youngstown bankruptcy attorneys can help you:
- Exploring alternatives to bankruptcy that might fit your situation better, such as a loan modification or debt consolidation
- Making sure you’re eligible for Chapter 7 bankruptcy before you try to file
- Helping you gather and organize your financial records
- Filling out the necessary paperwork and making sure your petition is submitted to the proper court
- Representing you during any court hearings, including handling any objections from creditors.
Filing for bankruptcy is a big step. It’s important to make sure you have all the facts before you file. To make sure you’re fully informed and that the process goes as smoothly as possible, get help from the Youngstown Chapter 7 bankruptcy lawyers at Amourgis & Associates, Attorneys at Law.
Call us today or visit our contact page for a free initial consultation.