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What to expect when filing for Chapter 7

You wake up in the middle of the night thinking about your overdue taxes or other debt. You have maxed out your credit cards to pay medical bills or simply keep groceries in the house. You have borrowed from friends or family to stave off creditors like the IRS. You and your spouse argue constantly about money. Does this sound like you?

If so, you are like many who struggle with debt and are uncertain how to get your head above water. Undoubtedly, you have heard about Chapter 7 bankruptcy, but perhaps you are focused on its drawbacks. By understanding how Chapter 7 works, you may be able to make an informed decision about whether it is appropriate for you.

What is the process for Chapter 7?

Your first step is to ascertain whether your situation qualifies for Chapter 7 by passing the means test. This test tallies your income and expenses along with any assets you may own to see if you fall within the eligibility range for Chapter 7. If you pass this test and have not had recent bankruptcies or bankruptcy dismissals, you may be ready to begin the process. The general steps include these:

  • Going through credit counseling
  • Filing the appropriate application forms
  • Turning your finances over to a court-appointed trustee
  • Meeting with creditors to verify information on your application
  • Receiving approval for bankruptcy
  • Liquidating non-exempt property to pay creditors
  • Completing a class on finances and budgeting
  • Discharging any remaining debt

The whole process takes three to six months. Of course, you likely have many questions, such as which of your assets are non-exempt and what you can expect in a meeting with your creditors. This is where the assistance of an experienced attorney will prove valuable to you.

Focus on the positive

When you file for Chapter 7 bankruptcy, your credit score will likely take a hit. However, it probably has already if you are behind on your payments. The good news is that you can start rebuilding your credit score almost immediately by setting goals, sticking to the plan and making all your payments on time.

This will be something you will have to make a priority, but rather than occupying your mind with fear, this process can occupy your mind with hope. Additionally, you do not have to feel alone while you go through it. There are compassionate and skilled professionals in Ohio who can help you determine the best options for your circumstances and guide you through them.

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