Michigan Bankruptcy - Chapter 7:

Chapter 7 laws liquidate debts without payment. Chapter 13 requires that debts are repaid, in whole or in part, over a term of months. Because of these uniquely exclusive purposes, the impact of a Chapter 7 Michigan bankruptcy is quite different as compared to a Chapter 13 Michigan bankruptcy. The term "straight bankruptcies" is old term which still survives today and is sometimes used to describe cases filed under Chapter 7.

Most consumer debts are dischargeable. Routine discharges are available for mortgage deficiencies, car notes, credit cards, accounts payable, and many others. Certain debts are not dischargeable, and in general, include liabilities owed to government authorities (taxes, fines, penalties) and civil liability for debts imposed on others without permission (child support, judgments for damages, DWI, DUI, theft, fraud, etc.).

Michigan Bankruptcy Protection:

The primary purpose of Chapter 7 laws is to discharge debts and provide debtors a "fresh start." However, all people who file are not entitled to a discharge of all debts. Limitations are imposed on who may file, and the particular debts that may be discharged. Michigan bankruptcy courts are charged with an affirmative duty to review compliance with all applicable rules and statutes. Likewise, trustees and creditors may file objections and direct the courts attention to noncompliance. Depending upon the classification for each debtor who files and classification of debts included within the estate, the application of Chapter 7 laws is unique for each person who files.

In practice, most individuals who file Michigan bankruptcy under Chapter 7 do receive a discharge without surrendering significant assets. Most often, this favorable result for debtors occurs after careful review and planning. If significant assets are subject to seizure, or discharge of debts is questionable, debtors often choose reorganization or avoid filing altogether using one of the many alternatives available today. Avoid all surprises.

Each Chapter provides debtors with a wide assortment of options. The benefits received by debtors depend largely upon property owned, past conveyances, and individual purposes in filing. Because the law evolves constantly in reaction to new circumstances encountered by the Courts, qualified legal counsel is essential to gain the maximum benefit available.

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