Ann Arbor MI Bankruptcy Attorneys

A Chapter 7 bankruptcy is a liquidation plan. While not all debts can be discharged (including, among others: tax liens, student loans, child support and other domestic support obligations), many of them can be. (It is worth noting that a discharge of debt will not remove a lien on a property.) Unlike a bankruptcy under Chapter 13, there is no maximum limit imposed on how much debt you may possess.

Under a Chapter 7 bankruptcy, a court-appointed trustee will sell off all your non-exempt property in order to pay off as many of your creditors as possible. While creditors do have the right to object to a discharge in court, once a debt has been discharged under Chapter 7 you no longer carry any liability for that debt. Chapter 7 bankruptcy is meant to give you a fresh start by discharging as many of your debts as possible.

How Filing for Chapter 7 Bankruptcy helps:

Under the federal Bankruptcy Code, filing a petition for bankruptcy will "automatically stay" harassing collector calls, most wage garnishments, and the majority of other collection actions. While not necessarily permanent, this stay is meant to grant you a reprieve from collection actions until your bankruptcy case is decided.

Am I Eligible to file for Chapter 7 Bankruptcy?:

If your income is higher than your state's median income, you may be subject to a "means test." This test is meant to ensure that you are not abusing the protections offered under a Chapter 7 bankruptcy. Due to this test, it is critical that you obtain the representation of an experienced, quality bankruptcy attorney to represent your interests throughout your Chapter 7 action. If, during the "means test", the court determines that you are being "presumptively abusive" your action will either be converted to a Chapter 13 bankruptcy (with your permission), or it will be dismissed.

The Chapter 7 Bankruptcy Process:

Meeting of Creditors: Within 20 to 40 days after you file your petition, the court-appointed trustee will hold a meeting of creditors. You must attend this meeting. If you have filed a joint bankruptcy petition with your spouse, you both must appear. During this meeting, your creditors will ask you questions regarding your financial situation. After this meeting, the trustee will advise the court on whether or not your case contains a presumption of abuse. If there is no presumption of abuse, you can expect a discharge order within 60 to 90 days after the meeting of creditors. (In some cases, the discharge order may take longer. If, for example, a creditor files a complaint objecting to the discharge.)

In addition to the "means test", a qualified bankruptcy attorney will assist you in compiling and filing the numerous documents the court requires during a bankruptcy case, including: a schedule of assets and liabilities, detailed information on your current income and expenses, a statement of your financial affairs, a schedule of contracts and unexpired leases, and a recent tax return.

Credit Counseling: Under the U.S. Bankruptcy an individual must receive credit counseling within 180 days before the filing of his or her petition to be eligible to be considered a debtor. Attorney Lander McLoyd will provide you the contact information for a credit counseling agency approved by the Bankruptcy Court.

Certificate of Credit Counseling: In addition, you will be required to turn in a certificate of credit counseling. You may also be required to turn in a copy of any debt repayment plan developed through such counseling, evidence of wages (if any) received in the 60 days prior to filing, information on your net income and any anticipated increases in income or expenses, and a record of any interest you may hold in qualified federal or state education or tuition accounts. (11 U.S.C. § 521) You must also provide a detailed list of all creditors and the amount and type of debt associated with each. Your attorney will assist you by ensuring that all necessary documentation is filed with your petition.

Schedule of Exempt Property: A schedule of exempt property must also accompany your petition. While the bankruptcy code is a federal code, and thus primarily the same from state to state, some states have additional legislation regarding exempt property. Ann Arbor bankruptcy attorney Lander McLoyd has over thirty years of legal experience, and is thoroughly versed in Michigan bankruptcy law. With Lander by your side, you can be assured that every item eligible for exemption will be claimed as such.

If you are an individual who desires a quick resolution to your financial crisis, or if you have over $336,900 in debt and cannot qualify for a Chapter 13 bankruptcy, then bankruptcy under Chapter 7 may be your best option. Due to the liquidation aspect of a Chapter 7 bankruptcy, you may not wish to pursue this option if you are a sole proprietor. Partnerships and corporations do not qualify for bankruptcy under Chapter 7.

Experienced Ann Arbor attorney Lander McLoyd can help you decide if a Chapter 7 bankruptcy is right for you. Don't wait to secure your financial future - contact Lander today.