How Do I File Chapter 7?
How to File for Chapter 7 Bankruptcy in Detroit, MI
The most common form of bankruptcy is Chapter 7. This is the form of bankruptcy that gives a debtor the opportunity to "discharge" many unsecured consumer debts. The process is fairly quick, usually completed within about 4 – 6 months. This is the right form of bankruptcy for those who are in very serious financial trouble, with too many debts that just cannot be managed. Although this form of bankruptcy allows for assets above a certain value to be liquidated to pay off the debt, a large majority of people actually lose nothing other than many of their debts.
The process is fast and always follows certain steps. Detroit attorney Marshall D. Schultz has helped over 10,000 people in the Detroit area with this process and has over 50 years of experience in bankruptcy law. Call the firm for assistance, as filing for Chapter 7 is not a simple process for a regular person who is unfamiliar with the bankruptcy court. Any error can seriously backfire, and it is important that you don't take any chances.
The Steps in Filing Chapter 7
- Step 1. Eligibilty - Determine if you qualify to file for Chapter 7. This step involves the "means test" which measures your assets, liabilities, and income against the state's median. If you fall below the median, you will qualify. The means test is a complex test, and it must be completely accurate. It is advised that you get help from a professional, as you definitely do not want to make any errors. Many people qualify.
- Step 2. Credit Counseling - You will be required to complete credit counseling within 90 days prior to filing. If you submit your petition to the court and have not completed the requirement of credit counseling, your petition will be rejected. There are only certain credit counseling firms that are approved by the federal government. We can help you with deciding which firm to use.
- Step 3. Fill Out Bankruptcy Forms - Your petition must include all the required data, including the means test, which is actually a schedule of your assets/liabilities, your current income, any leases or contracts you have signed, and a list of which assets you own that are exempt. This is not a simple process, and although you have the right to file without an attorney, it can be almost impossible to wade through the forms and to be successful in submitting all of the information correctly without legal help.
- Step 4. File Petition - The petition, as well as your certificate of completion from the credit counseling service is submitted to the district court that has jurisdiction over where you live. Fees are paid unless you have a waiver approved that will allow you to proceed without a fee.
- Step 5. Submit Documents Required - You will be required to submit any pay stubs from your work to the bankruptcy trustee the court has appointed you with, at least one week (7 days) prior to the meeting with creditors.
- Step 6. Attend a Creditors' Meeting- The meeting with creditors is held within a few weeks, typically within 3 – 6 weeks from the day of filing the petition. You are required to attend this meeting. In many cases, no creditors appear, but it is still a requirement that you attend. Our attorney will be with you at this meeting to assist you.
- Step 7. Attend Personal Financial Management Instruction Course.- After filing, you will be required to complete a financial course, "Personal Financial Management Instruction." This must be completed within 45 days of your filing and is essentially training on how to budget your money so you avoid bankruptcy in the future.
- Step 8. Completion - The court will notify you that your debts are discharged, and you are completely free of the debts that were eligible for discharge, typically credit card debt, medical bills, personal loans, and other unsecured consumer debts.
Can My Application Be Denied?
There may be some instances where you can be denied for Chapter 7 Bankruptcy. The most common reason you can be denied can be because of:
- Attempting defraud
- False information in financial records
- Failure to attend any counseling requirements or courses
Contact Marshall D. Schultz and speak to us about filing for Chapter 7 bankruptcy protection.
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