Michigan Bankruptcy Questions

WHAT IS THE AVERAGE FAMILY INCOME IN MICHIGAN?

According to the US Census the average family incomes in Michigan are:

Family Size / Average Income

2-person families	50,441
3-person families	60,085
4-person families	72,591
5-person families	70,028
6-person families	60,035

WHAT IS CHAPTER 7 BANKRUPTCY?

Chapter 7 bankruptcy (or a straight bankruptcy) is a liquidation proceeding. The debtor turns over all property that is not exempt to the bankruptcy trustee who then sells it to raise cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start".

One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.

WHAT IS A CHAPTER 13 BANKRUPTCY?

Chapter 13 Bankruptcy (or a reorganization bankruptcy). Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. If you have non-exempt property you would like to keep this may be the chapter for you.

WILL MY SPOUSE BE AFFECTED?

No, your spouse will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. However, In community property states, either spouse can contract for a debt without the other spouse's signature on anything, and still obligate the marital community. There are a few exceptions to that rule, such as the purchase or sale of real estate; those few exceptions do require both spouse's signatures on contracts.

Your bankruptcy lawyer will be able to guide you in this regard.

WHAT DOES BANKRUPTCY COST?

It costs $299 to file a Chapter 7 bankruptcy. A bankruptcy lawyer's fees vary but should be in the range of $1,000 to $2,000. Many bankruptcy lawyers will give you a free initial consultation. You can keep the fees down by being well organized and well prepared. You may also be able to keep the fees down by not requiring the lawyer to attend the meeting of creditors with you. Check this with your lawyer. In some states such as Massachusetts, attorneys must attend the Section 341 meeting with the debtors otherwise attorneys are deemed to have NOT represented the debtors. (The 341 Meeting).

WHAT DEBTS ARE ERASED BY A BANKRUPTCY?

Most unsecured debt is erased in a bankruptcy
except for:

Child support and alimony, DUI related judgments, student loans, and recent income taxes. Check with your lawyer for a full list.

WILL I EVER GET CREDIT AGAIN?

Yes! A number of banks now offer "Secured Credit Cards" where a debtor (you) puts up a certain amount of money (as little as $200) in an account at the bank to guarantee payment. Usually the credit limit is equal to the security given and is increased as the debtor proves his or her ability to pay the debt. Two years after a bankruptcy discharge, debtors are eligible for mortgage loans on terms as good as those of others with the same financial profile, who have not filed bankruptcy.