Many people in the Detroit area are struggling with debt due to medical bills, unemployment, legal problems, or other factors. If you are one of them, you need to understand all your options, including Chapter 7 bankruptcy. Attorney John Steinberger is a board-certified bankruptcy attorney who has helped thousands of people get free from the burden of debt through Chapter 7 bankruptcy.
Chapter 7 bankruptcy is commonly known as “fresh start” bankruptcy, and for good reason. Chapter 7 allows you to discharge (wipe out) much of your debt while keeping the things that matter most to you, giving you a foundation on which to build a strong financial future.
Chapter 7 is sometimes referred to as “liquidation” bankruptcy because the bankruptcy trustee overseeing your case has the authority to gather and sell (liquidate) your non-exempt property for the benefit of your creditors. While there is a possibility you might have to give up some of your property in a Chapter 7 bankruptcy, much or all of your property may be considered exempt under federal or state law, allowing you to keep it. In fact, in about 99% of cases, the bankruptcy trustee does not seize or sell any of a debtor’s assets.
Although you are probably filing for bankruptcy in order to wipe out your debt, there are some debts that you may want to continue paying, such as your mortgage and your car loan. If you reaffirm (agree to continue paying) these debts, you can keep the property so long as you keep payments current. You will be liable for the debt after the bankruptcy is closed and the creditor can sue you.
If you are liable on any debt jointly with a spouse or co-signer, they will remain responsible for that debt unless they also file for bankruptcy. To learn more about Chapter 7, check out our Chapter 7 Bankruptcy resources.
If you are thinking about Chapter 7 bankruptcy, there are many advantages you should consider in evaluating whether filing under this chapter of the Bankruptcy Code is right for you. These include:
Chapter 7 bankruptcy allows you to discharge most or all of your debt, including medical bills, credit card bills, and personal loans. Some debts, like most student loans, spousal support, and child support, cannot be discharged in Chapter 7.
If you are in a hurry to put your debt behind you, Chapter 7 might be right for you; most Chapter 7 cases take less than six months from start to finish.
When you file for Chapter 7 bankruptcy, an “automatic stay” is imposed on creditors, immediately preventing them from contacting you or repossessing your property.
Bankruptcy law includes exemptions that allow you to keep a certain amount of value in a home, vehicle, household goods, clothing, and certain other personal items. Many Chapter 7 cases are “no asset” cases, in which all of the debtor’s assets are considered exempt.
Chapter 7 bankruptcy does not erase debt from a home loan or mortgage. However, it can help you stay in your home longer if you are facing foreclosure, and can offer you options for dealing with a car loan, especially if you are behind in payments or your car is worth less than you owe.
It’s true that filing a Chapter 7 bankruptcy will negatively affect your credit score, but so does remaining in debt. If you complete your Chapter 7 case, you have a clean slate from which to begin slowly rebuilding your credit. A Chapter 7 bankruptcy remains on your credit report for 10 years from the date of discharge.
These benefits help to explain why Chapter 7 is the most popular option for consumer bankruptcy filings. Even so, Chapter 7 is not right for everyone. You should consult with an experienced Michigan bankruptcy attorney to determine if you can file for Chapter 7 bankruptcy.
Attorney John Steinberger has decades of legal experience and has filed over 10,000 bankruptcies in his career. Each of those represents someone like you who was burdened by debt and got the help they needed to make a fresh financial start. Most of them wish that they had done so sooner.
If you are worried about how to resolve your debt, you do not need to figure it out alone. Contact John A. Steinberger & Associates, P.C. today to discuss your options and begin moving toward a brighter financial future.
With a Michigan Chapter 7 bankruptcy, you generally discharge all your debts and make no payments to your creditors unless the credit is for a vehicle or mortgage and you wish to retain the property. With a Michigan Chapter 13 bankruptcy, you repay a portion of all your creditors over a period of time, generally 3 to 5 years.
The law provides generous exemptions which allow most people to retain all of their property. However, it is required that you list all of your property when you are filing for a Chapter 7 Bankruptcy Petition in Michigan. If you fail to list property that you could have kept, you could lose that exemption. Failure to list property, which includes anything of value which you own or have an interest in, could result in denial of your discharge or criminal prosecution. Examples of property which must be listed are household goods, vehicles, houses or other real estate that you may have an interest in, any money owed to you, lawsuits pensions, IRAs, benefits, bank accounts, any financial account, stocks, bonds, child support, pensions, lawsuits or claims for benefits or lawsuits that have not even been filed, inheritances or property from a divorce to which you become entitled to within 6 months of filing, etc. Be careful to review your schedules to make sure that all of your property is listed.
The bankruptcy will be reported on your credit for 10 years from the date that you receive a discharge. Your credit history will still appear on the credit report; however, the creditors have no legal right to collect unless the debt is non-dischargeable. You can usually purchase a vehicle after the discharge; however, the interest rate will generally be very high. You may be able to obtain a mortgage or refinance a house usually 2 to 3 years from the date of filing.