What are the benefits of filing for Chapter 7 bankruptcy in Ohio?
As a consumer, you have two options when filing for bankruptcy. Chapter 13 is a long process that involves working with creditors in order to establish repayment plans for you debts. Chapter 7 is a far simpler process. You should understand some of the main benefits of filing for Chapter 7 bankruptcy.
Have Your Qualifying Debts Completely Discharged
The first benefit is that Chapter 7 bankruptcy allows you to have qualifying debts completely discharged. This means that those debts will simply go away so that you never have to repay them. Discharging debts is very different from what happens with Chapter 13 bankruptcies where you just form a restructured payment plan. It is important to remember that some debts like student loans, mortgages and secured loans do not qualify to be discharged.
More than One Way to Qualify
Another advantage is that there is more than one way to qualify for Chapter 7 bankruptcy. The first and simplest way to qualify is by having a low income. Your income must be below a specific amount that is sometimes adjusted during the year. The second way to qualify is through a means test. This is a test where your basic expenses are subtracted from your income to see if you have enough left over to pay creditors. If you do not, then you might qualify for Chapter 7 bankruptcy.
Stop Collection Calls Right Away
Collection calls can become a major problem if you are drowning in debt. The calls can come at all hours of the day and night and sometimes even at work. The bill collectors might violate the law, make threats or become very aggressive. An advantage of filing for Chapter 7 bankruptcy is that collection calls will stop right away. Those creditors or bill collectors will have to take part in the bankruptcy process or wait until the resolution of the case to do anything more.
Keep Your Most Important Assets
Your assets are going to be looked at closely when you file for Chapter 7 bankruptcy. There is a myth that you will always lose everything. This is not true. Your most important assets are protected. This includes your primary car, house and the personal possessions that you need to live comfortably. You might be ordered to liquidate or sell other extraneous possessions. Keeping your most important assets is a very large benefit because you can come out of bankruptcy mostly unscathed and restart fresh.