What to Know About Chapter 7 Bankruptcy in Dayton OH

Chapter 7 Bankruptcy In Dayton OH gives debtors a legal means of erasing debts. Most debtors file bankruptcy because of medical bills, job loss, or overextended credit. Chapter 7 bankruptcy is commonly chosen because it is the quickest. You have two ways to file bankruptcy. You can voluntarily file a petition with the court yourself. In some cases creditors may legally demand a debtor to file bankruptcy. This is rare, but it allows the creditor to get payments when the debtor refuses.

Chapter 7 bankruptcy involves the selling of assets by a trustee. The money generated from sales is divided among creditors and the remaining debt gets discharged. Under Chapter 7, only unsecured debts qualify for discharge. Unsecured debts mean no collateral was put up for the debt. Unsecured debts include medical bills and unsecured credit cards. Certain unsecured debts cannot be discharged under Chapter 7 such as student debts or alimony.

Not everyone can file for Chapter 7 bankruptcy. You must pass a means test to qualify. The means test determines your qualification by comparing your wages to the average wages in your state for a household your size. This keeps debtors who have sufficient income to pay debts from taking advantage of the system. If you fail the means test, you cannot file Chapter 7. You must file Chapter 13 if the courts determines you have enough income to pay debts. Chapter 13 bankruptcy allows you to pay creditors in three to five years with a new payment plan. You do not have to sell assets.

A benefit of filing bankruptcy is the automatic stay. The automatic stay prevents creditors from contacting you about debt. It prevents lawsuits and further attempts at collection. You do not have to be concerned about getting your utilities cut off for twenty days. If you are facing foreclosure, it will stop the proceedings temporarily. The automatic stay does not prohibit the IRS from auditing you or demanding a tax return. It will not stop you from having to fulfill non-monetary obligations from criminal proceedings like community service or wage garnishment because of loans from pensions.

When you see no way out of debt, Chapter 7 bankruptcy in Dayton OH is the logical solution. It can put you on the path to freedom from debt.

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