Chapter 7 Bankruptcy in MI – Frequently Asked Questions
Q: What is the difference between a Chapter 7 and Chapter 13 bankruptcy in MI?
A: With a Michigan Chapter 7 bankruptcy. you generally discharge all your debts and make no payments to your creditors unless the credit is for a vehicle or mortgage and you wish to retain the property. With a Michigan Chapter 13 bankruptcy. you repay a portion of all your creditors over a period of time, generally 3 to 5 years.
Q: Can I keep my property if I file for a Chapter 7 bankruptcy in MI?
A: The law provides generous exemptions which allow most people to retain all of their property. However, it is required that you list all of your property when you are filing for a Chapter 7 Bankruptcy Petition in Michigan. If you fail to list property that you could have kept, you could lose that exemption. Failure to list property, which includes anything of value which you own or have an interest in, could result in denial of your discharge or criminal prosecution. Examples of property which must be listed are household goods, vehicles, houses or other real estate that you may have an interest in, any money owed to you, lawsuits pensions, IRAs, benefits, bank accounts, any financial account, stocks, bonds, child support, pensions, lawsuits or claims for benefits or lawsuits that have not even been filed, inheritances or property from a divorce to which you become entitled to within 6 months of filing, etc. Be careful to review your schedules to make sure that all of your property is listed.
Q: How long will a Chapter 7 bankruptcy be on my credit record?
A: The bankruptcy will be reported on your credit for 10 years from the date that you receive a discharge. Your credit history will still appear on the credit report; however, the creditors have no legal right to collect unless the debt is non-dischargeable. You can usually purchase a vehicle after the discharge; however, the interest rate will generally be very high. You may be able to obtain a mortgage or refinance a house usually 2 to 3 years from the date of filing.