Overview of Chapter 7 Bankruptcy (Part B)
November 29th, 2010
Basics of Chapter 7 Bankruptcy
Chapter 7 bankruptcy can be considered a liquidation plan designed to relieve a debtor of their debts. Chapter 7 bankruptcy is one of the harshest forms of debt relief as it requires all non-exempt property and assets to be sold to help repay your debts to creditors. In addition, not all forms of debts can be relieved through filing chapter 7 bankruptcy.
Some debts which still must be repaid include:
- tax liens;
- student loans; and
- domestic/child support.
Filing for chapter 7 bankruptcy will also not remove a lien on a property. Chapter 7 bankruptcy typically covers consumer debts such as credit card balances and car loans.
Chapter 7 Bankruptcy Process
Aside from the initial determination of eligibility for chapter 7 bankruptcy, you must undergo credit counseling within 180 days before you file your petition. Upon completion of counseling through an approved service, you must provide a certificate of credit counseling with your petition, as well as a debt repayment plan if one was developed as part of your counseling.
Before you file for chapter 7 bankruptcy you also must submit the following income evidence, including:
- your wages (if any) received in the 60 days before filing,
- evidence of your net income and anticipated increases or expenses, and
- records of interest held in federal or state education/tuition accounts.
Your Michigan bankruptcy attorney can assist you in locating all this information and providing it to the court.
Once your initial information is prepared and submitted with the help of your Michigan bankruptcy attorney, you will be allowed to file your petition for chapter 7 bankruptcy. The petition must accompany a schedule of exempt property that details the property that should be exempt from liquidation if your petition is approved.
Many debtors have made the mistake of improperly preparing their schedule of exempt property, which leads to devastating results. Any property eligible for exemption and not included on this listing will be liquidated to assist in repaying your debts. To avoid unnecessary losses such as these, a Michigan bankruptcy attorney is an invaluable asset on your side to make sure that all eligible exemptions are recorded.
How Can a Michigan Bankruptcy Attorney Help?
If times have gotten so tough that you feel you have no alternative but to declare bankruptcy in Michigan, it's important that you protect yourself from companies that take advantage of consumers when they are at their lowest financial point. The Michigan bankruptcy attorney team at Johnson & McLoyd will provide an honest, thorough assessment of your personal financial situation and explain the bankruptcy options available to you. Contact us today for a no-cost consultation - 734-669-9080. We are available evenings and weekends to provide you with bankruptcy help in Michigan.