How Does Chapter 7 Bankruptcy Really Work?

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A Chapter 7 Bankruptcy is often referred to as a "fresh start," but what does that mean for you, your family, and your financial future?

Chapter 7 of the Federal Bankruptcy Code was designed to help individuals facing a financial crisis get rid of as much debt as possible, as quickly as possible in order to get back on their feet with a chance to start fresh. Under a Chapter 7 Bankruptcy, there is no maximum limit on how much debt a person may have. However, not all debts are eligible for discharge (e.g., taxes, student loans, and child support obligations).

While Chapter 7 bankruptcies are often resolved quickly, it is imperative that you obtain the counsel of a qualified bankruptcy attorney. Your attorney will help you gather information for your petition, file your petition, and represent your interests during the meeting of creditors and in court.

Before you file for bankruptcy, you will need to gather numerous financial documents, including: a schedule of assets and liabilities, detailed information regarding your income and expenses and other pertinent documentation. Your bankruptcy attorney will ensure that all necessary documents accompany your bankruptcy petition.

When you file a petition for bankruptcy under Chapter 7, the court appoints a Trustee to oversee your case. The Trustee is responsible for protecting the interests of your creditors and ensuring that all applicable rules and regulations are followed.

Within approximately one month after your petition is filed, a meeting of creditors will be held. At this meeting, you will be asked questions regarding your current financial situation. Based on the answers you provide, the Trustee will advise the court on whether you are eligible for protection under Chapter 7.

If the court determines that you are eligible for protection under Chapter 7, the Trustee will sell off (or "liquidate") all of your non-exempt assets in order to pay your creditors (what is considered "exempt" may vary depending on your state).

Typically, a discharge order is issued two to three months after the meeting of creditors is held. While creditors do have the right to object to a discharge in court, once the discharge is obtained you are no longer liable for that debt.

Our bankruptcy attorneys can help you file for Chapter 7 Bankruptcy if you live in Ohio or Kentucky. For more information or to learn if Chapter 7 Bankruptcy is right for you, contact Kathleen Mezher & Associates, LLC.

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Cincinnati, Ohio 45251
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