Michigan Bankruptcy Laws/Charging into Bankruptcy
I, Walter Metzen, will provide, free of charge as part of your free initial Bankruptcy Analysis, a means test calculation to determine if you are eligible for Chapter 7 Bankruptcy. Nearly 90% of the people who walk through my door are eligible to file a Chapter 7 Bankruptcy in Michigan and get a permanent discharge of their debt. With Chapter 13 Bankruptcy in Michigan, we can develop and affordable repayment plan to fit every budget.
Contact me, Michigan bankruptcy attorney Walter Metzen to learn more about how I can help you get a Fresh Financial Start!.
Detroit Chapter 7 Bankruptcy Lawyer
Chapter 7 is one of the most common and least complicated forms of bankruptcy. As a bankruptcy attorney who has handled thousands of Chapter 7 filings, I can help you understand how this type of bankruptcy may be beneficial to your case. I am Walter Metzen, an attorney that has been assisting clients and practicing law in Detroit, Michigan for over 14 years. My goal is to get you the debt relief you need in order to regain control of your debts and alleviate the stress that your financial troubles may be causing.
Chapter 7 is commonly known as straight or liquidation bankruptcy. Under this chapter, you are seeking to have your debts discharged, which means the legal obligation to pay creditors is canceled. You can pay all or some creditors after bankruptcy if you feel morally obligated, but is not legally required. You can file Chapter 7 no more than once every 6 years. Certain types of debts are non-dischargeable. With some exceptions, they include student loans, taxes, alimony and child support, fraudulent debts, debts for embezzlement or larceny, debts incurred from purchasing luxury items or for taking large cash advances shortly before filing, fines and penalties, debts incurred as a result of a willful or malicious injury, unscheduled debts and debts denied discharge in a prior bankruptcy.
Secured debts are fully dischargeable but you may lose the collateral because valid liens survive bankruptcy, and the creditor is free to repossess or foreclose on the collateral once the bankruptcy case is concluded. If you want to keep the collateral you must reaffirm the debt. Reaffirmation means a legal re-obligation to pay the debt as if the bankruptcy never occurred. In exchange for reaffirming the creditor will allow you to keep the pledged property because the creditor is assured payment. Reaffirming requires that you sign a written contract that is filed with the court. You will most likely want to reaffirm on your home and automobile, but not charge cards or other debts unless there is good reason.
Once your petition is filed, a trustee is appointed to represent the best interest of your creditors. The trustee is given broad power under the law. He can set aside improper transfers of property, and can even recover money paid to creditors shortly before filing. The trustee makes sure that all creditors are treated fairly and equally in the bankruptcy proceeding.
Most importantly, however, the trustee is responsible for collecting and liquidating certain valuable assets at a bankruptcy sale. Your creditors are notified of the sale and have an opportunity to bid, or object to someone else's bid. Sale proceeds are distributed to creditors based upon the classification and priority of their debt. Any money left over is returned to you after creditors and administrative expenses are paid.
The trustee theoretically has an interest in all non-exempt assets you own up to the date the petition is filed. These assets, as a group, are called the bankruptcy estate. With limited exception, property you acquire after filing does not become part of the bankruptcy estate, and can not be taken by the trustee.
Does this mean you lose everything? Not at all. In most cases, your valuable property is either secured or exempt. Much of your other property, as a practical matter, may not be worth the expense of conducting a sale. A typical rule of thumb is that property with a value of less than $1000 will not be sold by a trustee.
The laws allow you to keep certain property above any liens or encumbrances to preserve your ability to live. These are called property exemptions. Exempt property, up to certain value limits, includes your home, vehicle, furniture, appliances and various other personal possessions. A complete list of exempt property is found under this site on the Assets & Exemptions page.
Can the trustee sell secured property? If the trustee sells secured property, he must first pay off the lien. Therefore, the trustee will not sell any secured property that at a minimum does not exceed the value of the lien. Therefore, if you can afford the payments on the secured debts, you can reaffirm with the creditor to keep the collateral if you choose.
For this reason, most people can keep their home and automobile, as there is usually limited equity in such property. A home, for example, may have a secured mortgage which leaves little or no equity in the property. Equity is further eroded if you deduct 10% of the home's sale price as an estimate of closing costs. In New York, a husband and wife can exempt up to $20,000 of equity in their home. As long as equity does not exceed the exemption amount, the trustee is left with nothing to distribute to unsecured creditors if the property were sold. Therefore, the home has no value to the bankruptcy estate, and the trustee will not sell the property. The same holds true for a motor vehicle with equity less than $2,400.
Approximately 45 days after filing the petition, you are required to attend a meeting, known as the Section 341 first meeting of creditors. There, the trustee will determine whether there are assets to be liquidated, or whether there has been any improper conduct affecting your case. There is usually only one meeting, but occasionally a second meeting is scheduled if further information is needed. Your creditors are free to appear and ask questions as well, but creditors rarely attend. The length of the meeting may vary. It usually takes no more than an hour for all scheduled cases on the calendar to be completed.
Approximately two months after the meeting date, the court issues the discharge order signifying the conclusion of the case. The two month waiting period is designed to allow the trustee or a creditor enough time to file an objection to dis-chargeability, if appropriate. These objections to discharge are known as adversary proceedings, and are usually based on some alleged fraudulent activity. The U.S. Trustee's office, a branch of the Justice Department, can also object if they find that there has been a substantial abuse of the bankruptcy laws. The vast majority of cases, however, will be concluded without objections, and honest debtors should have nothing to fear.
The average case is completed in three to four months. You then have a fresh start, free from the harassment of creditors. While your creditors will not be paid after discharge, some can treat the discharged debt as a loss on their income tax return.
In a Chapter 7 filing, a list of all your outstanding debts is made. These are the debts that may be discharged completely. This is different from a Chapter 13, where your debts are reorganized and structured payment plans are created.
After the Chapter 7 filing, your creditors receive notice that the bankruptcy has been filed; are given an opportunity to object to the bankruptcy or to file claims to retrieve collateral under security interests they hold; and also barred from harassing you due to a stay that is in place prohibiting such actions. An experienced Board Certified Michigan Bankruptcy Attorney like me can help you determine which debts are subject to liens or not dischargeable.
Contact a Detroit Chapter 7 Bankruptcy Lawyer that, not only fully understands the bankruptcy process, but also can realistically advise you of your options. Feel free to schedule your free initial consultation. During this time, we can discuss your case and I can help you take charge of your financial situation.
Contact me, bankruptcy attorney Walter Metzen to learn more about how I can help you get a Fresh Financial Start!.
Be sure to Obtain a copy of your Credit Report after your Michigan Bankruptcy Filing and check it for Mistakes.
Contact me, bankruptcy attorney Walter Metzen to learn more about how the new Chapter 7 bankruptcy law may affect your case. I offer a free initial consultation so we can discuss your case personally.
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