Michigan Chapter 7 Bankruptcy Facts

Recovery after the recession that started in the U.S. at the end of 2007 has been slower than expected and jobs have grown at a very inconsistent and patchy rate. Michigan was one of the 8 states that got hit the hardest by the recession due to huge layoffs and closures in the automotive industry. In 2009 the state lost over 280K jobs and unemployment rate was around 16%.
In this tight economy many consumers who have accumulated debt have been pushed to either seek debt relief or file for bankruptcy. Chapter 7 is generally the simplest and quickest form of bankruptcy and is available to individuals, married couples and companies.
So what is Chapter 7 bankruptcy? Here are the key points to bear in mind if you are considering filing for bankruptcy in the state of Michigan:
• It is a court process (known as “liquidation”) and one of the quickest and simplest ways to wipe out credit card, medical or other unsecured debts.
• In Chapter 7 bankruptcy the trustee will collect all of the debtor’s assets and sell any non-exempt assets.
• Michigan Exemptions – in the Michigan Chapter 7 there is a list of “Bankruptcy exemptions”. In most cases the debtor’s property is exempt so when you file for bankruptcy under Chapter 7 you are allowed to use Michigan state laws i.e. “exemptions” to safeguard your personal property. The trustee may sell your property only if it is worth more than what the exemption amount is.
• Non-Dischargeable Debts – there are some debts such as child support, alimony, student loans or some types of taxes that cannot be discharged in Chapter 7 in Michigan bankruptcies which means that you will still be accountable for paying these debts even after your discharge.
• Reaffirmation Agreement – if you sign a voluntary “reaffirmation agreement” you might be permitted to keep certain secured debts such as your furniture, car or house, however if you decide to do that you cannot wipe-out this debt again for another eight years – you will still owe it and will be obliged to continue with payments.

In conclusion, if you are considering filing under Chapter 7 Bankruptcy and are a resident of the state of Michigan, you should call Firebaugh and Andrews at 734-722-2999 for a free consultation.