Chapter 7

Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Debtors whose debts are primarily consumer debts are subject to a means test designed to determine whether the case should be permitted to proceed under chapter 7. If your income is less than the median income for your state of residence and family size, you may file a Chapter 7. In Ohio, the median income for a family of four is currently $71, 453. If you are a family of four, and you make less than this amount, you may be eligible to file a Chapter 7 bankruptcy. If you are a family of four, and make more than this amount, you may still be able to file a Chapter 7 bankruptcy, but further analysis will be necessary.

Under chapter 7, you may claim certain of your property as exempt, or protected, under governing law. For example, you may keep a motor vehicle that has less than $3, 335 of equity. So if you have a car that you own outright, with no loans or liens, and it is worth $3,000, that car will be protected in a Chapter 7 bankruptcy. The trustee will not take the vehicle, and you will still own it outright after your Chapter 7 discharge. If you own a new vehicle worth $30,000, but you still owe the creditor $28,000, you can likewise retain or keep the vehicle. However, whether it’s a good idea to keep the vehicle is something you should discuss with your attorney. If property is not protected by an exemption, it may be taken in a Chapter 7 bankruptcy and sold. The proceeds would be used to pay your creditors. We will work hard to protect or exempt as much of your assets as possible while complying with the law.

To find out the value of your motor vehicle, consult: www.nada.com

Sometimes people make too much money, or own assets that have value beyond the applicable exemptions, and filing Chapter 7 is not possible or advisable. In those cases, they may choose to file a Chapter 13 bankruptcy.