Macomb County Chapter 7 Bankruptcy

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a specific form of bankruptcy that comes under the classification of liquidation. Bankruptcy is a complicated legal matter that should never be entered into lightly, but it’s also an important financial tool that may help you regain your financial footing to the degree that you’re afforded a fresh start. If you have questions or concerns about Chapter 7 bankruptcy, discuss the matter with an experienced Michigan Chapter 7 bankruptcy attorney today.

A Fresh Financial Start

With a Chapter 7 bankruptcy, you wipe the financial slate clean and begin again. In this version of bankruptcy, you liquidate your assets, which involves a trustee gathering all your nonexempt assets and selling them as a means of paying off the debt that’s plaguing you. In the State of Michigan, you can protect all the following assets via the exemption process:

• Up to a specific amount in home equity
• Up to a specific amount in car equity
• Pensions and retirement plans, which makes it important not to cash in such accounts prior to filing
• Certain household goods, jewelry, and other personal possessions, such as tools
• Life insurance

The Chapter 7 bankruptcy process allows you to walk away from those debts that your liquidated assets don’t cover.

Your Home and Car

Within a Chapter 7 bankruptcy, there are ways of protecting your home and vehicle, which are both obviously important to your future. An important element of doing so, however, is remaining current on your payments – or finding a way to catch up – and remaining within the parameters regarding equity. Retaining these debts involves signing a voluntary Reaffirmation Agreement, which means you cannot include the property in a Chapter 7 bankruptcy for at least eight years.

The Kinds of Debt You Can Eliminate

The kinds of debt that you can eliminate in a Chapter 7 bankruptcy include all the following:

• Credit cards
• Personal loans
• Medical bills
• Loan deficiency debt, such as a surrendered mortgage or vehicle
• Any judgments or garnishments
• Past due utility bills

Debts You Cannot Eliminate

There are certain kinds of debt that a Chapter 7 bankruptcy cannot discharge, and these include the following:

• Child support
• Spousal support – or alimony
• Certain taxes
• Student loans
• Fraudulent debts, such as debt based on obtaining a fraudulent credit card
• Certain items you charged on credit

The Michigan Means Test

In order to file for a Chapter 7 Bankruptcy in Michigan, you’ll need to pass the means test if your income is higher than the state median, which is updated every six months. If your income exceeds this amount for the size of your household, the means test comes into play. This test involves deducting all allowable monthly expenses from your current monthly income in order to establish your disposable income. If your disposable income remains below the set amount, you may still qualify for Chapter 7 bankruptcy.

Consult with an Experienced Michigan Chapter 7 Bankruptcy Attorney

The formidable Chapter 7 bankruptcy attorneys at Aiello & Associates have helped many clients resolve their concerns related to crushing debt and move forward into brighter financial futures, and we’re here for you, too. Learn more by contacting us today.