Bankruptcy can be a difficult legal process to understand, especially when each state has its own laws regarding bankruptcy procedures. Many people have questions about a Chapter 7 bankruptcy and what this means for them. At Karen E. Evangelista P.C., we’re here to help people in Michigan understand if they qualify for Chapter 7 and whether or not this option is right for them.
Many people struggle to pay their bills and other everyday expenses, and filing for bankruptcy can help individuals focus on improving their financial picture.. There are different types of bankruptcy, and Chapter 7 is a common filing type that many individuals qualify for. When someone files for Chapter 7 bankruptcy, they knowingly allow a bankruptcy trustee to liquidate or sell certain property to pay off debts. Some property is protected by state law, also known as exempt property. Additionally, Chapter 7 bankruptcy helps individuals dismiss some of their debt, including credit card debt. However, not all debts can be forgiven, such as student loans and alimony. Every filing is different, so while some debt may be forgiven for one individual, it may not be for someone else.
It is important to remember that in order to file for Chapter 7 bankruptcy you have to meet certain qualifications. In Michigan, an individual’s household income will need to be looked at to determine if they can file. Michigan has outlined monthly income requirements based on how many members live in the home. If a monthly income falls below the income standards for that household, individuals are usually allowed to apply for a Chapter 7 bankruptcy. Karen E. Evangelista P.C. can explain Michigan’s median income requirements to you and determine if your income falls below Michigan’s averages.
To pass Michigan’s income calculations, also known as the means test, an individual must calculate their total monthly income over the course of 60 months. If that amount is over $12,475, then you are not qualified to apply for a Chapter 7 bankruptcy. However, if it is less than $7,475, you are allowed to apply. If an individual’s monthly income falls between these values, they should consult with an attorney to help them determine if they qualify.. Additionally, an individual doesn’t need a specific amount of unsecured debt to apply for Chapter 7 bankruptcy.
Just because an individual qualifies for Chapter 7 does not mean it is the best option for them. Talking with a trusted attorney can help an individual determine if they qualify and whether this is the best course of action.. Understanding the legal process for bankruptcy in Michigan can seem overwhelming, but our experienced legal team at Karen E. Evangelista P.C. can help make the process easier and answer any questions you may have about filing for bankruptcy.
If you have questions about Chapter 7 bankruptcy, contact our office today. We’re here to help with all of your legal needs.