Filing Chapter 7 Bankruptcy in Michigan
Chapter 7 Bankruptcy for Debt Elimination
The Chapter 7 bankruptcy allows you to make a fresh financial start by legally eliminating your unsecured debt obligations. By filing Chapter 7 you have options to keep your home and property (if you are current on payments and within allowed equity parameters) or you can surrender and release financial obligation for unwanted real or personal property such a vehicle or home.
Chapter 7 allows you to eliminate debts such as:
- Credit cards
- Medical bills
- Personal loans
- Loan deficiency debt (i.e. surrendered mortgage or vehicle)
- Past due utility bills
- Judgments and garnishments
Call our Michigan bankruptcy law firm toll-free today at 866-261-8282 for a free consultation on how you can experience total debt relief through filing a Chapter 7 bankruptcy in Michigan. At that meeting we will conduct a comprehensive evaluation of your finances, answer all of your questions and advise you on the best course for debt resolution. We have offices located throughout Southeastern Michigan: Detroit, Ann Arbor, Dearborn, Southfield, Flint or Warren, Michigan.
What is Chapter 7 Bankruptcy & How Do I File?
Chapter 7 bankruptcy is a means to eliminate unsecured debts, surrender unwanted personal property and gain a fresh financial start. The process typically spans 4 – 5 months, although court protection is immediate once the case is filed. This means no more creditor calls, letters, collections or legal actions such as wage garnishment.
Here are the general steps for filing Chapter 7:
- #1Meet with a qualified bankruptcy attorney to ensure you eligible to file. The main qualifiers are:
- Your total household income over the previous 6-month time period. Investigation of your household income and expenses is known as a Means Test
- Equity or assets you possess, to ensure everything can be protected with the allowed exemptions;
- Timing of a previous Chapter 7 filing. You are eligible to file a Chapter 7 bankruptcy every 8 years from the date of your previous Chapter 7 filing. If it has not been 8 years, you still qualify to file a Chapter 13 bankruptcy to gain creditor protection and debt relief.
- #2 If you decide to file with Acclaim Legal, you next determine if you want to pay the attorney fees upfront or if you prefer and qualify to put $0 down and finance the fees with Fresh Start Funding, a third-party lending partner.
- #3 Retain the firm and obtain the credentials to complete the pre-filing credit counseling requirement. This is a simple but necessary step in the process. The credit counseling can easily be completed over the phone or on-line to generate the completion certificate. The certificate is filed with the court at the time of your case filing.
- #4Gather and provide required documentation such as:
- 6 months of income detail (such as pay stubs);
- Last 2 years of income tax returns;
- Copies of all bills and debt obligations, etc. We pull a merge credit report for all of our clients as part of our services.
- #5 Review and sign prepared Chapter 7 bankruptcy petitions and schedules. At Acclaim Legal Services, only licensed attorneys prepare the required bankruptcy filing paperwork. This ensures accuracy and proper exemptions and documentation are all completed for the best client outcome.
- #6 The Chapter 7 case is then filed and a case number is established. This case number provides you with creditor protections and stop actions such as judgments and garnishments.
- #7 You are required to attend a 341 court hearing with your attorney. This is an informal but mandatory hearing.
- #8 The last step is for you to complete the Post-filing Debtor Education course. Similar to the pre-filing credit counseling step, this 2nd step counseling can easily be completed online and then filed by your attorney with the court.
- #9 You are now clear for a discharge of debts! This is a document processed and provided by the court. The typical timing is about 60 days from a concluded 341 hearing. Your court discharge is your legal proof of debt elimination and should be retained for your records.
- #10 Begin a fresh start with your finances. We typically recommend starting with a small secured loan (vehicle, secured credit card, etc.) and establishing on-time monthly payments to build your credit. The most influential factor of your credit score is recent payment history (accounts for 35% of your score!) so this is the best start towards improved credit.
Exemptions from Chapter 7 bankruptcy
You are allowed to claim certain assets and properties as exempt from the bankruptcy process under a Chapter 7 bankruptcy and therefore keep them protected. At the time of your free consultation we will review your assets and advise you of your available exemptions.
Common exemptions include the following, but only up to certain values for each:
- Equity in a primary residence or motor vehicle
- Household goods
- Life insurance
- Select other property
- Qualified retirement accounts
For most Chapter 7 bankruptcy cases, there is little or no non-exempt property. Because of this, there is no liquidation of any assets in your Chapter 7 case. These are referred to as no-asset cases.
Alternative to Filing Chapter 7
A Chapter 13 bankruptcy may be more advantageous for you if:
- You have assets you would like to keep that cannot be declared as exempt under Chapter 7 bankruptcy guidelines and would therefore be subject to liquidation by a Trustee.
- You have a second mortgage or home equity loan that could be removed and likely mostly eliminated under a Chapter 13, but not under a Chapter 7.
- You have certain priority debts, such as current IRS tax debts, that can be reorganized under a Chapter 13 but are non-dischargeable under a Chapter 7.
- You a facing creditor actions such as home foreclosure or vehicle repossession and wish to maintain the home or vehicle by setting up reasonable repayment terms.
- You want modify your vehicle contract(s) if you have a high interest rate and/or reduce the principal balance owed on the vehicle if you have owned if for over 2.5 years.
Debt Settlement is a consideration if you have:
- A limited number of creditors;
- A small amount of debt relative to your income;
- Funds on-hand to make a lump sum payment to creditors.
We offer free consultation to review all of your available options.
Chapter 7 Bankruptcy Attorneys
Debt can be overwhelming and all-consuming. Don’t continue to stress about your finances, call us today for a free consultation. Our experienced Chapter 7 Bankruptcy Lawyers will discuss all of your options and make the determination of what is best for your circumstances and long term financial goals.
Call one of our experienced bankruptcy attorneys at 866-261-8282 to determine if Chapter 7 or Chapter 13 is the right choice for you.
We offer free in-office or phone consultations to review your personal circumstances, analyze your situation and advise you on the best course of action. We specialize in bankruptcy law, debt resolution, foreclosure prevention and credit repair. We have offices in Detroit, Southfield, Dearborn, Flint, Ann Arbor and Warren, Michigan. Please call us toll free at 866-261-8282 or click here to schedule a consultation right now.