Chapter 7 Bankruptcy in Michigan
Bankruptcy is a legal status in which an individual does not have the financial capacity to pay his or her debts.
In order for a person to claim this status, he or she must file for bankruptcy with the courts. A judge will look at the person’s financial profile and decide whether he or she is eligible to claim such a status. One can apply for several chapters of bankruptcy. Chapter 7 and chapter 13 are the most common chapters for individual debtors. The individual may apply alone or seek the assistance of a chapter 7 bankruptcy Michigan attorney. Hiring an attorney is the easiest and best option.
Talk to a Fakhouri Law Group attorney today to see if you bankruptcy is the right option for you. We provide more than just consultations—we educate our client so that you may make an informed decision that is best for you and your family. If bankruptcy is not the best option, there are many alternatives - alternatives that we may also be able to assist you in exploring.
Mandatory Credit Counseling
Part of the 2005 changes to the bankruptcy code added a requirement that you must receive credit counseling during the 6 month period prior to filing for chapter 7 bankruptcy in Michigan. In some situations, this can be cut down to within 30 days of filing your bankruptcy petition. Without this credit counseling, your case will be dismissed.
Filing a Chapter 7 Bankruptcy Petition
Submit a petition, along with the necessary financial information. Once your Chapter 7 case is filed, the automatic stay goes into effect and protects you from being harassed from creditors. You will be required to give all property of the bankruptcy estate to the trustee. However, this should not scare you. In many cases a strong attorney can exempt most, if not all of your property to prevent the trustee from seizing your property.
Trustee Takes Over
Approximately 1-2 weeks after filing your petition, a court-appointed trustee will take over your case. They will review your paperwork and handle any actions to be taken on your property. At this time, the trustee will also set a date for your Section 341 meeting of creditors. With the right legal representation, this hearing is typically very short as your attorney will have prepared the petition properly and accurately. Failure to provide accurate information on your petition could lead to unfavorable results.
The 341 Meeting of Creditors
Usually between 25 and 45 days from the date of filing, you will be required to meet with the trustee at a Section 341 hearing. At this hearing, you will be sworn under oath and asked basic questions about your petition. This meeting also allows creditors who are listed on your Chapter 7 Petition to appear and ask their own questions about the related debt.
Administration of the bankruptcy estate. Among other duties, the trustee is required to serve as an administrator of the bankruptcy estate. Thus, any seized assets in the bankruptcy estate will be dispersed to the creditors. However, in many cases, there are no assets in the bankruptcy estate. Therefore, for many people, chapter 7 bankruptcy provides for the best of both worlds – a discharge of their debts, without losing any of their assets. Again, it is important that you seek the advice of a bankruptcy attorney prior to filing to avoid the risk of loss of assets.
A fresh start! Soon after your discharge is granted, your case will be closed and you will no longer be liable to most or all of your creditors. Please note that this only provides a broad picture of the Michigan chapter 7 bankruptcy process. Each case is unique and brings with it special circumstances and particular issues. The right attorney can mean the difference between a successful discharge and a brutal bankruptcy process that may not even lead to a discharge – or worse!
In order to protect one’s reputation and assets, it is in the best interest of the debtor to consult with a Michigan bankruptcy law firm. Attorneys are available for free consultation and advice on the subject. Interested parties should contact Fakhouri Law Group immediately.