Chapter 7

Chapter 7 is for people with moderate to lower incomes that have debt that they need to get rid of (discharge) because they cannot afford to continue making payments. Most debts are dischargeable (i.e., credit cards, personal loans, medical bills), some are not (student loans, most taxes, criminal restitution, debts incurred by fraud, etc.). A Chapter 7 case usually take 100 days from filing to discharge, but as soon as your case is filed, ALL creditors must stop calling or making any attempt to have you pay any debt. There are, of course, certain debts (secured) that you will want to keep (home mortgage, car loan, boat, etc.), and that you can do, but whether it is a good idea is something that we discuss in detail. Unlike Chapter 13, a chapter 7 bankruptcy case does NOT involve the filing of a plan of repayment. Instead, [in theory] the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. The REALITY is that liquidation does not happen in 95% of Chapter 7 cases (and never in Chapter 13). The Bankruptcy Code allows the debtor to keep certain "exempt" property; but a trustee will liquidate the debtor's remaining assets (again - rarely). Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property. This is where a good bankruptcy attorney comes in -- he's there to protect your home and other major assets.

Contact Details

• 51424 Van Dyke Avenue, Shelby Township, MI, USA

• 6515 Highland Rd, Waterford Township, MI, USA