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Chapter 7 Bankruptcy

A Macomb County Chapter 7 Attorney Can Steer You in the Right Direction

Understandably, most potential clients looking for a Chapter 7 lawyer are not versed in the bankruptcy law, sometimes identified as the “bankruptcy code.” This makes sense, because most people have never had to worry about bankruptcy before. Jeffrey J. Randa, a bankruptcy attorney in Macomb County, makes sure you are informed of what a Chapter 7 filing entails, how it impacts you and what it will mean for your future.

Understanding Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a form of bankruptcy in which your general, unsecured, debts are wiped out. Chapter 7 bankruptcy is also called “liquidation bankruptcy” or “straight bankruptcy.” Unsecured debts are debts without any collateral. Just about every debt except a car or home is considered unsecure.

The classic example of an unsecured debt is credit card debt, since the credit card company does not obtain a lien on anything you purchase with your credit card. This is only logical, because you can buy all kinds of goods (including food) and services with a credit card and, in many cases, it would be impossible to secure a lien over good and/or services received. If you are not sure if your debt is secured or unsecured, we can help. We have more than two decades of experience as a Chapter 7 law firm. We have seen plenty of unusual cases, and are confident that we can advise you in even the most difficult or extreme cases.

Non-Dischargeable Debt

Will all of your debts disappear once you file for Chapter 7 bankruptcy? Possibly not, but you will be able to better focus on any non-dischargeable debts once your unsecured debts are cleared.

Some debts are simply not dischargeable in bankruptcy. These can include debts for child or spousal support, debts incurred on the basis of fraud (such as being dishonest on a credit card application or writing a bad check), recent debts for luxury items, and some tax debts. Student loans, except in very narrow circumstances, are also non-dischargeable. Debts tied to property, such as a car or home, are considered secured debts and do not receive discharge unless you give back the collateral, meaning the home or the car. You can generally keep your home or car in Chapter 7 bankruptcy if you can pay for them.

Debts that generally do fall under the Chapter 7 discharge include credit card, gas card, retail store cards and most medical bills.

Choosing Chapter 7

To qualify for a Chapter 7 bankruptcy, you must have a limited amount of disposable income. Our law firm has been handling Chapter 7 bankruptcy cases since 1993, so we can figure your situation out with just a few questions. After explaining the process to clients, we review your income to determine if you are eligible for a Chapter 7 filing (you must be capable of passing a Chapter 7 means test). If you earn too much income, you may be required to file for Chapter 13 bankruptcy. If this is the case, we can steer you in the right direction for that, as well.

The Process of Chapter 7 Bankruptcy

After your case is filed under Chapter 7, the court directs that a person called a “trustee” be appointed to administer your case. It is this administrator’s job to review your filing and liquidate any non-exempt assets you might have to pay back to your creditors, if you have any. Through liquidating your assets, your creditors are at least paid back in part for the money owed to them. This rarely happens, however. In the overwhelming majority of Chapter 7 cases, a person can safely keep everything he or she owns.

In almost all cases, there isn’t any non-exempt property to sell for the creditors’ sake. Because most people have very little to no property that is not exempt, the average person seeking relief under Chapter 7 bankruptcy generally keeps all of his or her personal property.

Chapter 7 Timeline

Once you file for Chapter 7 bankruptcy, the process usually takes only a few months to complete. In fact, one major benefit of a Chapter 7 filing is the ability for a debtor to quickly discharge most debts and begin a fresh financial start in a matter of weeks. While the Chapter 7 process does not provide a way to catch up on missed payment to avoid foreclosure or repossession of non-exempt property, if it turns out that your interests are best served in that way, experienced bankruptcy lawyer Jeffrey J. Randa can help you understand how Chapter 13 can help, and who to call.

The law firm of Jeffrey J. Randa has assisted thousands of clients in Macomb County through the Chapter 7 bankruptcy process. We can help you, too.

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