How Chapter 7 bankruptcy Works
Chapter 7 bankruptcy, sometimes call a straight bankruptcy is a liquidation proceeding. In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Most chapter 7 cases are "no-asset" cases, which means that you don't have nonexempt property for the trustee to sell. Eligibility to file Chapter 7 is determined by the means test instituted with the 2005 amendments to the bankruptcy code.
Filing Chapter 7
The case is begun by filing the official petition, schedules and statement of financial affairs. These forms prompt you to list all of your assets and all of your debts, along with some recent financial history. Not all debtors are eligible for Chapter 7 protection
Call (313) 982-0010 for a free consultation with a bankruptcy attorney.
Who is Eligible for a Chapter 7 Bankruptcy?
Under the new bankruptcy law, you are eligible to file for bankruptcy under Chapter 7 if you earn less than the median income in state of Michigan.
Chapter 7 bankruptcy requires a means test and pre-bankruptcy counseling.
The new bankruptcy laws mandate that consumer debtors must complete one of these US Trustee approved programs of "Credit Counseling" prior to filing either Chapter 7 or Chapter 13 bankruptcy. Before you are allowed to file a Chapter 7 case, you must attend a credit counseling course and your lawyer must submit a certificate of completion of this course at the time your Chapter 7 case is filed.
In addition that If you decide to file for Chapter 7 bankruptcy protection, you must pass the mean test to determine if you qualify to file Chapter 7 bankruptcy. The idea behind the means test is to reserve Chapter 7 bankruptcy for people who cannot afford or don't have the "means" to pay their creditors. The purpose of the Chapter 7 means test is to establish whether you are truly bankrupt or whether you actually have expendable income after paying your monthly expenses to make minimal payments to your creditors through a Chapter 13 bankruptcy plan.
How does the means test work? Is Your Income Low Enough for Chapter 7 Bankruptcy?
The means test was designed to limit the use of Chapter 7 bankruptcy to those who truly can't pay their debts. It does this by deducting specific monthly expenses from your "current monthly income" (your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly "disposable income." .
Most debts can be discharged or liquidated under
Chapter 7
A bankruptcy discharge is the statutory forgiveness of most debts, most of which were incurred before the filing of bankruptcy (prepetition debts). This is the essential feature of bankruptcy that gives debtors their fresh start, which is one of the main purposes of bankruptcy law.
As soon as you file for Chapter 7 bankruptcy, collection efforts will stop.
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Would Filing Chapter 7 Bankruptcy Help? Ask yourself the following questions:
•Am I having trouble paying bills?
•Am I having trouble paying for living expenses?
•Have I recently lost income?
•Do I owe a lot in credit card debt?
•Do I have a lot of medical bills?
•Am I in over my head in payday loans?
If you answered “yes” to any of the above questions, then filing Chapter 7 bankruptcy may be an option for you.
Filing Chapter 7 under the
new laws
It's easier than you think!
Benefits of Chapter 7
•Stop harassing creditor phone calls & letters. You will end the calls from creditors and you will be able to stop most of the garnishments that you are facing.
•There are no payments to your creditors
• Stop utility shut off and can re-establish service
•Stop suspension of your license for unpaid tickets or accident claims
With debts being discharged, not only are you financially free and emotionally relaxed from the stress and anguish over how you will make ends meet
Michigan Bankruptcy Attorneys
