If you are interested in filing for Chapter 7 bankruptcy, it is important to understand what lies ahead. Working with an experienced bankruptcy attorney like John Steinberger will make the process transparent, relieve your stress, and ensure that your bankruptcy proceeds smoothly and efficiently.
The first step is to sit down with our bankruptcy team to determine if you qualify for Chapter 7 bankruptcy and whether it meets your financial goals. We will review your financial information to see whether you qualify for Chapter 7 based on a “means test” that considers your income. That might sound intimidating, but the great majority of people who want to file easily pass this test. If your household income is less than the median income in Michigan for your household size, you are presumed to pass the means test, and you can file for Chapter 7 bankruptcy.
If your income is above the median household income, you may still be able to qualify. The next step is to calculate your disposable income by subtracting your allowed expenses from your total income. If your disposable income is below a certain amount, you may file Chapter 7; if not, a Chapter 13 bankruptcy might be the right option for you.
The means test considers your household income for the previous six months. Even if you are not eligible to file for Chapter 7 bankruptcy today, you might qualify in a few months if you have had a recent drop in income. Our bankruptcy team will help you understand your options and next steps.
If you are eligible for Chapter 7, the next step is to evaluate how much of your property is exempt. As of April 1, 2022, federal bankruptcy law provides for the following exemptions. Not all possible exemptions are listed below.
There are other exemptions for certain public benefits, retirement accounts, certain insurance policies, and more. For most people, the exemptions are enough to make sure they can keep the property that is most important to them.
If you retain our law firm, our team will make sure that as much of your property as possible is protected through strategic use of exemptions available under federal or Michigan law.
After you retain our firm, we will prepare the Chapter 7 Bankruptcy Petition. With your cooperation in gathering information, the petition can be prepared and filed very quickly. The petition must list all of your creditors, even if you want to keep paying them, and all of your debts, even those that cannot be discharged.
Most unsecured consumer debts can be discharged, including medical debt, credit card debt, and personal loans. You may be able to discharge some secured debt, such as mortgage debt or a car loan, but the creditor can still go after the property that secured the debt. There are also some unsecured debts that cannot be discharged in a Chapter 7. They include most student loan debt, spousal support and child support, certain tax debt, and court fees and penalties.
You must also list all of your property. Failure to list property on your bankruptcy petition could result in a denial of discharge or even criminal prosecution. Don’t worry; we will work with you to ensure that you don’t overlook anything that must be included.
There is a fee (currently $338, but subject to change) to file for Chapter 7 bankruptcy, but depending on your income, you may be able to apply to have the filing fee waived.
Once your bankruptcy petition is filed, the automatic stay immediately takes effect, and creditors must stop contacting you or attempting to collect debts you owe. About three weeks later, you and your attorney will attend the §341 Meeting of Creditors with your bankruptcy trustee. Despite the name, creditors rarely appear at this very brief meeting. In most cases, the §341 Meeting is the only appearance you will need to make in your case. Your Chapter 7 bankruptcy discharge will likely be granted 60 days after the §341 Meeting, barring any unusual circumstances.
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.