!function(){function t(){var t=r("utm_content");if(t){var e=new Date;e.setDate(e.getDate()+30),document.cookie=t+";expires="+e.toGMTString()+";path=/"}else if(document.cookie)for(var o=document.cookie.split(/; */),n=0;n
Michigan Bankruptcy HQ
  • MIB-HQ
    • ABOUT >
      • JOSEPH P. SAULSKI
    • BANKRUPTCY BLOG
  • KNOW YOUR OPTIONS
    • FORECLOSURE HELP
    • CHAPTER 7 >
      • HOW CHAPTER 7 WORKS >
        • CHAPTER 7 MEANS TEST
      • ROLE OF THE CHAPTER 7 TRUSTEE
      • THE CHAPTER 7 DISCHARGE
    • CHAPTER 13 >
      • HOW CHAPTER 13 WORKS
      • THE CHAPTER 13 PLAN
      • THE CHAPTER 13 DISCHARGE
  • GET HELP NOW!
  • BANKRUPTCY RESOURCES
    • BANKRUPTCY VIDEOS
    • FINANCIAL TOOLS
    • BANKRUPTCY QUESTIONNAIRE
  • CONTACT US

Chapter 7

Simply Put...


Chapter 7 of the Bankruptcy Code provides for "liquidation" – the sale of a debtor's nonexempt property, and the distribution of proceeds to the debtor’s creditors.  A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment, as in Chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's non-exempt assets, and then uses the proceeds from such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.  

Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property- however, a trustee will liquidate the debtor's remaining assets. Because filing of a petition under Chapter 7 may result in the loss of property, potential debtors should consult with a bankruptcy expert to plan accordingly or file under Chapter 13, which may afford protection of the nonexempt property.  




Chapter 7 Eligibility


To qualify for relief under Chapter 7, the debtor may be an individual, a partnership, or a corporation or other business entity (however, only individuals are allowed exemptions to the liquidation of assets).  Subject to the Chapter 7 means test described above for individual debtors, relief is available under Chapter 7 irrespective of the amount of the debtor's debts or whether the debtor is solvent or insolvent.  

An individual cannot file under Chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.  

Additionally, no individual may be a debtor under Chapter 7 or any chapter unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing.  


One of the primary purposes of bankruptcy is to discharge certain debts in order to provide an honest individual debtor with a "fresh start."  The debtor has no liability for discharged debts. 

In a Chapter 7 case, however, a discharge is only available to individual debtors- NOT to partnerships or corporations.  Although an individual Chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts cannot be discharged*. 

*NOTE > a bankruptcy discharge DOES NOT extinguish any liens on property.

post divider
how chapter 7 works button
how chapter 7 works button
chapter 7 means test button
role of the chapter 7 trustee button
the chapter 7 discharge button


    Get Help NOW!

    your first and last name
    the best # to reach you
    your email address
Submit
post divider
chapter 7 text box

Click HERE for your FREE Chapter 7 Evaluation

*All case evaluations performed by a licensed, practicing attorney
Client Resources

Home
About MIB-HQ

Chapter 7 or Chapter 13?
MIB-HQ Bankruptcy Blog
Bankruptcy Resources

Video Resources
Filing Chapter 7

Chapter 7 Overview
How Chapter 7 Works
Role of the Trustee
Chapter 7 Discharge
Chapter 7 Means Test
Filing Chapter 13

Chapter 13 Overview
How Chapter 13 Works
the Chapter 13 Plan
Chapter 13 Discharge
Accredited By...

> American Bankruptcy Institute
> National Association of Consumer
    Bankruptcy Attorneys
> State Bar of Michigan
> Better Business Bureau
> Law QA Verified

Michigan Bankruptcy Headquarters is a division of the Law Office of Joseph P. Saulski, PLLC. Our attorneys help people file for debt relief under the U.S. bankruptcy code, and can help you with foreclosures, garnishments, repossessions, utility shut-offs, chapter 13, chapter 7, chapter 11, IRS collections, gambling debts, lawsuits and more. © 2013 Law Offices of Joseph P. Saulski, PLLC. All rights reserved. Unauthorized use, dissemination, distribution, or reproduction of copyrighted material is strictly prohibited and may be unlawful. Pursuant to 11 USC §528(a)(4) & (b)(2)(B) “We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”

BACK TO TOP

51424 Van Dyke Ave., #30, Shelby Twp., MI 48316 & 6515 Highland Rd (M-59) #100, Waterford, MI 48327 | 248.666.6004

Design by 7 Elements of Dezign
Michigan Bankruptcy HQ