Michigan Chapter 7 Bankruptcy - Overview

Do you have more debt than you think you can pay back? Do you need advice regarding a Michigan Chapter 7 Bankruptcy? John Steinberger is a Board Certified Bankruptcy Attorney with over 25 years of experience.  He has filed over 10,000 Michigan bankruptcies during his career.  If you are looking for a Detroit bankruptcy attorney, John Steinberger and his team have the experience you need.

After listening to your story and reviewing your financial information, our law firm will advise you an what type of bankruptcy, if any, may be best for your family.  Filing for a Michigan Chapter 7 Bankruptcy generally results in the discharge of debts.  Filing for a Michigan Chapter 13 Bankruptcy generally results in a reorganization and structured payment of your debts.

What is a Michigan Chapter 7 Bankruptcy?

1. Debts Discharged: With a Michigan Chapter 7 Bankruptcy, most debts are discharged if the creditor (party to whom the debt is owed) is listed on your Chapter 7 Bankruptcy Petition.  If you do not list a creditor on the petition, any debts to that creditor will not be discharged.  You must also list creditors whose debts are not discharged and creditors whose debts you intend to pay (see below).
   
   
2. Debts Not Discharged: Some debts may not be discharged.  Examples of debts that are not discharged are child support, student loans under most circumstances, certain taxes, etc.  If you retain our law firm, we will review your financial information and determine what debts cannot be discharged.
   
   
3. Exempt Property: The bankruptcy laws allow you to "exempt" some of your property.  This means that you will be able to keep some of your property and not use it to pay off debts.  Our bankruptcy attorneys will review the property you have listed on the schedules and determine the proper exemptions. The following are examples of typical Chapter 7 Bankruptcy exemptions:
   • Approximately $30,000.00 under Michigan bankruptcy law for equity in a home
   • Approximately $9,000.00 in household goods under Federal bankruptcy law
   • Approximately $9,000.00 in cash under Federal exemption in certain cases.
     
     
4. Debts You May Want to Continue to Pay (Mortgage, Car Loan and Loan on Household Items): You may keep your house, vehicle and certain financed household items as long as you continue to keep the payments current and sign a reaffirmation agreement provided by the creditor.  Certain creditors, especially for vehicles, may stop sending a statement after the case is filed, and if you want to keep this property you must maintain the payments.  Reaffirmation agreements are only valid if filed with the court. Reaffirmation agreements can be cancelled at anytime prior to discharge or within 60 days of filing the agreement. Cancellation of a reaffirmation agreement should be done in writing and filed with the court.  The effect of reaffirming a debt makes you liable for the debt after the bankruptcy is closed and allows a creditor to sue you on the debt if it becomes delinquent.  If a reaffirmation agreement is not entered into for a vehicle or other property, the creditor may repossess the vehicle or property within 45 days after the first meeting.
   
   
5. Joint Obligation for Debt: If you have a joint obligation with a spouse or co-signer, he or she will still be responsible for that debt unless he or she also files for bankruptcy.
   
   
6. Michigan Chapter 7 Bankruptcy and Your Credit: The bankruptcy will be reported on your credit for 10 years from the date that you file.  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 1 to 2 years from the date of filing.