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Complications in Filing Chapter 7

Complications in Filing Chapter 7

: Richard West Law Office

Bankruptcy HelpUnderstanding Chapter 7 bankruptcy can be difficult, and knowing whether to file Chapter 7 in your individual case is never easy either. No two people’s financial situations are the same, and what’s good for the goose may not always be good for the gander. Here are a few common complications to Chapter 7 filing and a few possible solutions.

A Bankruptcy Lawyer Can Help

You may already know that in order to qualify for Chapter 7 filing status, you must pass what is commonly called the “means test.” Simply put, your income must be lower than the median income for your state. Of course it is slightly more complicated than that, but, for the sake of simplicity here, it will suffice. But even after qualifying, there are other complications that arise. For example, you may have assets that are not exempt from Ohio bankruptcy proceedings that you wish to keep. These non-exempt assets are largely at the discretion of the bankruptcy trustee who acts on behalf of the creditor; but there are ways to negotiate to keep some such assets. A bankruptcy lawyer can be a great help in such cases, fighting on your behalf.

If you are not current on your secured debts, such as your home or car payments, you may be worried about losing these assets. In many cases, the lender will allow you to keep the asset if you agree to a restructured payment plan including the arrearage from missed payments. Generally speaking, mortgage lenders are more willing to be lenient on this point than auto loan creditors, but this is only a rule of thumb.

Some debts are not dischargeable in bankruptcy, such as child support payments and some student loan debt. It is important that you know which debts you will be able to discharge should you file for bankruptcy and which you will still be held responsible for. A bankruptcy lawyer will help you choose the best course for your future.