Chapter 7 Bankruptcy - Eliminate Debt
Chapter 7 bankruptcy is called liquidation or wipe out. The basic idea is to wipe out your unsecured debts, like credit cards, medical bills, personal loans, judgments, etc. and have a fresh start. Chapter 7 bankruptcy also stops garnishments from your paycheck.
Most people are worried about keeping their house and/or car when filing Chapter 7. Chapter 7 allows you to keep your house if you continue to maintain your payments and if you can exempt the equity you have in that property. It also allows you to keep your car if you maintain the payments, have a reasonable payment and can protect the equity you have in it.
Each person that files a Michigan bankruptcy case gets different types of exemptions or dollar amounts to protect different types of property. In order to keep your property, the equity or value of the property must fall within these amounts. When you come in to see me, I will ask you a series of questions and evaluate your situation to make sure you can keep your property.
Chapter 7 also allows you to give back your home or your car. If you choose to do this, Chapter 7 also wipes out balances you may owe upon turning this property back to the bank or lender.
Typically, Chapter 7 does not eliminate student loans; debts from certain types of taxes; alimony, maintenance, or support payments; fines, penalties and criminal restitutions; debts incurred through fraudulent conduct; debts incurred through intentional injury to person or property; or debts from personal injuries caused by driving while intoxicated.
You WILL NOT qualify for Chapter 7 if:
- You filed Chapter 7 in the last 8 years.
- Have lots of assets or property with lots of equity
- Have high income without many expenses.
