Advantages & Disadvantages to a Michigan Chapter 7 filing:

Advantages to a Michigan Chapter 7 filing:

1. You receive a complete fresh start. After the bankruptcy is discharged the only debts you owe will be for secured assets on which you choose to sign a “Reaffirmation Agreement.”
2. You have immediate protection against creditor’s collection efforts and wage garnishment on the date of filing.
3. Wages you earn and property you acquire (except for inheritances) after the bankruptcy filing date are yours, not the creditors or bankruptcy court.
4. There is no minimum amount of debt required.
5. Your case is often over and completely discharged in about 3-6 months.

Disadvantages to a Michigan Chapter 7 filing:

1. You lose your non-exempt property which is sold by the trustee. If you want to keep a secured asset, such as a car or home, and it is not completely covered by your Michigan bankruptcy exemptions then Chapter 7 is not an option.
2. If facing foreclosure on your home, the automatic stay created by your Chapter 7 filing only serves as a temporary defense against foreclosure.
3. Co-signors of a loan can be stuck with your debt unless they also file for bankruptcy protection.
4. If you filed a prior case and received a discharge of your debts, you can only file a second Chapter 7 bankruptcy case eight years after you filed the first case.