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What You Need to Know – Michigan Bankruptcy Law

Bankruptcy is a way for individuals and small businesses to reduce or eliminate debt.  If your debt exceeds your income or you are only making the minimum payments, bankruptcy may be a great option to help you.

There are several different ways to file for consumer bankruptcy, the most common being Chapters 7 and 13.

A Chapter 7 bankruptcy will end with all your debt discharged (except for certain, non-dischargeable debts such as certain taxes, student loans under all but extraordinary circumstances, spousal and child support, among others).  However, under a Chapter 7, you may not be able to keep your house or car or other assets in which you have a lot of equity.

A Chapter 13 bankruptcy will allow you to keep all your property, including your home and car, but is only appropriate if you have a regular income because you will be making regular payments on your debt for 3-5 years.  Both chapters give you immediate protection from collection agencies, your creditors, and wage garnishment.

Why should I file for bankruptcy under Chapter 7?
  • You have no/low regular income.
  • You don’t have much equity in your assets or you don’t have many assets.
  • You want to be done with your debt and out of reach of your creditors.
Why shouldn’t I file for bankruptcy under Chapter 7?
  • You have assets you want to keep, such as a house or a car.
  • You previously filed for a bankruptcy under Chapter 7  or converted from a Chapter 13 to a Chapter 7 less than 8 years ago.
Why should I file for bankruptcy under Chapter 13?
  • You have a regular income.
  • You want to keep all your property, regardless of the amount of equity.
Why shouldn’t I file for bankruptcy under Chapter 13?
  • Your income will be tied up for 3-5 years.
  • Your debt will last for as long as your repayment plan (3-5 years).
  • You don’t have a regular income.
  • You can’t make regular payments on a schedule for 3-5 years.

Get A Free Consultation With Anne.

Filing for bankruptcy under either Chapter 7 or Chapter 13 is a highly technical process and requires a knowledgeable attorney to guide you through the process.

VanderBroek Law PLLC can help walk you through the process and find the best possible outcome for your individual situation.

Bankruptcy FAQ:

Will filing for bankruptcy stop all the collection calls, wage garnishments, and collection lawsuits?

YES!  Upon filing for bankruptcy, an “automatic stay” takes effect and creditors must stop all collection actions, even those started before the stay took effect.

Are all of my debts dischargeable in bankruptcy?

NO!  While most consumer debt, such as debt from credit cards, medical expenses, some lawsuits, and unsecured loans are dischargeable, certain other debts, such as student loans, child/spousal support, back taxes, and criminal restitution are not dischargeable in bankruptcy.

Will I have to appear in court?

Yes and No.  You will have to attend a meeting of the creditors (also known as a 341 meeting), the meeting is held before a Bankruptcy Trustee, not a judge, and is in an office building, not a courtroom.  However, even though the meeting is not held in a court room, the proceedings are “on the record.”  The typical 341 meeting lasts 30 minutes or less.

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