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Is Chapter 7 Bankruptcy Your Best Debt Relief Option?

On Behalf of | May 7, 2018 | Chapter 7 bankruptcy

Juggling finances can be tricky at best and overwhelmingly stressful if your money train derails. That said, you’d be hard-pressed to find anyone in Ohio or the nation, for that matter, who hasn’t experienced financial struggles at some point in life. The most critical issue is how aware of your options you are when financial problems hit and also how much you know about debt relief in order to choose the path that helps you move past crisis and restore financial stability.

Perhaps you’ve already determined that your most viable option is bankruptcy. You’re now faced with the challenge of figuring out which type of bankruptcy best fits your needs. As a homeowner filing as an individual, you may want to consider Chapter 7, especially if your mortgage lender is threatening foreclosure. As with all debt relief programs, you must satisfy all eligibility requirements before submitting a Chapter 7 petition in court.

Facts to help determine if you qualify

Filing for bankruptcy isn’t something you can simply jump into without knowing what to expect and what you must do to prepare for the outcome of your situation. To qualify for Chapter 7, your past six months’ income must be equal to or less than the median income in Ohio. You may also need to show evidence that you do not have enough disposable income to pay back your creditors.

Court jurisdiction

When you submit a petition for Chapter 7 bankruptcy, you’re essentially giving the court jurisdiction over all or most of your possessions. The court may then discharge your debts. It can also sell your non-exempt assets in order to pay back your creditors.

Options for secured debts

If you owe a secured debt, your creditor may take possession of the property to satisfy the debt you are not able to pay. You may have various options available, however, including whether to redeem, reaffirm or surrender said property. The first two options allow you to retain ownership either by entering a new payment agreement or by paying your creditor the value of the property.

No need to go it alone

There will be forms to fill out, fees to pay and other clerical processes to fulfill if you file for Chapter 7 bankruptcy. Worrying about your finances is stressful enough without adding further stress when trying to overcome your financial problems without seeking outside support. There are support networks in place to help you navigate the debt relief system and get your finances back on track.