Dearborn Heights, Michigan
Chapter 7 Attorney
One of the Best Bankruptcy Attorneys in Dearborn, MI
Office Location
23843 Joy Rd
Dearborn Heights, MI 48127
Monday – Friday : 9:00 am – 5:00 pm
Saturdays : 9:30am – 11:30 in office or by phone
We offer late night appointments as late as 6:30 by phone or in person Mon-Thur.
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Are you drowning in debt and searching for a way out? Look no further.
Frego Law, your trusted Chapter 7 lawyer in Dearborn Heights, Michigan, is here to guide you through the bankruptcy process and help you achieve financial freedom. With our expertise and years of experience, we understand the complexities of Chapter 7 and can provide you with the personalized support you need.
Imagine a life without the overwhelming burden of debt. With Frego Law by your side, you can eliminate your unsecured debts, such as credit card bills and medical expenses, and start fresh. Our team will work tirelessly to ensure a smooth and successful Chapter 7 bankruptcy filing, giving you the opportunity to rebuild your financial future.
Take the first step towards a debt-free life by contacting Frego Law today. Schedule your consultation with our Chapter 7 lawyer in Dearborn Heights, Michigan, and let us help you regain control of your financial situation. Don’t let debt hold you back any longer – call now!
What is a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a legal process that allows individuals and businesses to eliminate or discharge their debts and start fresh financially. It is one of the most common types of bankruptcy filings in the United States.
In a Chapter 7 bankruptcy case, a debtor’s nonexempt assets are liquidated, meaning they are sold to repay creditors.
One of the main advantages of filing for Chapter 7 bankruptcy is that it provides immediate debt relief from creditor harassment and collection efforts.
Once a bankruptcy petition is filed, an automatic stay goes into effect, preventing creditors from taking further action to collect on the debts. This stay also stops wage garnishments, foreclosure proceedings, and even halts pending lawsuits.
To qualify for Chapter 7 bankruptcy, debtors must pass the “means test,” which compares their monthly income to the median income in their state. If the debtor’s income is lower than the median, they automatically qualify for Chapter 7. If their income is higher, they will have to fulfill additional requirements to prove that they cannot afford to repay their debts.
During the Chapter 7 bankruptcy process, debtors are required to attend a “meeting of creditors” also known as a 341 meeting, where they are questioned by the bankruptcy trustee and any creditors who choose to attend. This meeting allows creditors to determine whether they believe the debtor should receive a discharge of their debts.
Once the bankruptcy judge approves the bankruptcy paperwork and the debtor has completed all necessary requirements, they can receive a discharge of their debts. This means that they are no longer legally obligated to repay the debts included in the bankruptcy.
Bankruptcies in the United States peaked in 2010, when 1.14 million Chapter 7 bankruptcies and 439,000 Chapter 13 bankruptcies were filed. These figures have since dropped to 229,703 and 149,077 respectively in 2022, despite the effects of the COVID-19 pandemic. [1]
What are the Reasons to File for Chapter 7 Bankruptcy?
- Immediate Relief from Creditor Harassment: One of the most significant advantages of Chapter 7 bankruptcy is that it provides immediate relief from constant creditor harassment and collection efforts. This means that your creditors are legally prohibited from taking any further action to collect on your debts.
- Get Rid of Unsecured Debts: Chapter 7 bankruptcy can help you eliminate unsecured debts, such as credit card bills, medical bills, personal loans, and payday loans. These kinds of debts are not tied to any collateral, making them eligible for discharge through Chapter 7.
- Fresh Start: By filing Chapter 7 bankruptcy, you have an opportunity to start anew. Once the bankruptcy process is complete, you can begin rebuilding your financial life without the burden of overwhelming debt.
- Protection of Exempt Assets: Many people mistakenly believe that filing for bankruptcy means losing all their assets. However, in Chapter 7 bankruptcy, most debtors can keep their property and belongings.
- Speedy Process: Chapter 7 bankruptcy is known for being a relatively quick process compared to other bankruptcy chapters. The entire process can typically be completed within a few months.
At the end of Q1 2023, housing-related debt topped $12.04 trillion and accounted for approximately 71% of household debt in the U.S. [2]
Do I Qualify for Chapter 7 Bankruptcy in Dearborn Heights, Michigan?
To qualify for Chapter 7 bankruptcy in Dearborn Heights, you must meet certain criteria. One of the key factors is your income. The bankruptcy laws implemented a means test to determine whether your income is low enough to qualify for Chapter 7.
This test compares your average monthly income over the past six months to the median household income in Michigan. If your income falls below the median, you automatically pass the means test and can proceed with a Chapter 7 filing.
If your income exceeds the median, you will need to proceed with further calculations to determine your eligibility. This involves deducting certain expenses and obligations to assess whether you have enough disposable income to repay your debts over a period of time.
If your disposable income is below a certain threshold, you may still qualify for Chapter 7.
There are also limits on the amount of secured and unsecured debts you can have to qualify for Chapter 7.
A 2023 CNBC survey found that 58% of Americans feel they live paycheck to paycheck. [2]
What Exemptions are Available When Filing Chapter 7 in Dearborn Heights, Michigan?
- Homestead Exemption: Under the homestead exemption, each Michigan homeowner can exempt up to $40,475 of the equity in real property. The amount increases to $60,725 for individuals aged 65 or older or those who are disabled. The amount is periodically adjusted by the Michigan Department of Treasury. This means that if your home's value is below the exemption limit and you have no more than the exempted amount of equity, it will be protected from liquidation.
- Vehicle Exemption: In Dearborn Heights, you can exempt up to $3,725 of equity in one motor vehicle. This exemption applies to both cars and trucks. If your vehicle's equity is below this amount, you can keep your vehicle without it being subject to liquidation.
- Personal Property Exemption: The personal property exemption in Michigan is generous. It allows you to exempt household goods, clothing, appliances, furniture, and other personal items up to a total value of $3,775 per individual or $7,550 per married couple. This exemption also includes jewelry, musical instruments, and other personal belongings.
- Tools of the Trade Exemption: If you are self-employed or use tools or equipment for work purposes, the tools of your trade exemption can protect these assets. The exemption allows you to protect up to $2,525 in tools, equipment, and other items necessary for your trade or profession.
- Retirement Accounts: In Dearborn Heights, most retirement accounts are also exempt. This includes 401(k)s, IRAs, and other qualified retirement plans. These accounts are typically protected from liquidation, allowing you to retain your retirement savings.
Steps to Take Before Filing for Chapter 7 Bankruptcy in Dearborn Heights, Michigan
- Assess Your Financial Situation: Start by thoroughly evaluating your financial situation. Make a complete list of all your assets, debts, income, and expenses. This includes credit card bills, medical bills, personal loans, tax debts, student loans, and any other outstanding obligations you may have. Understanding your financial circumstances will help determine if Chapter 7 bankruptcy is the right option for you.
- Explore Alternatives: Bankruptcy should be considered as a last resort. Before filing, explore alternative debt relief options. This may involve negotiating with creditors, setting up a repayment plan, or seeking credit counseling.
- Determine Eligibility: To file for Chapter 7 bankruptcy, you need to meet certain eligibility requirements. If your income falls below the median, you are likely eligible for Chapter 7.
- Complete Credit Counseling: Before filing for bankruptcy, individuals must participate in credit counseling from an approved agency. This counseling aims to provide education and guidance about alternatives to bankruptcy. It will help you understand the implications of bankruptcy and explore other potential solutions. After completing the counseling, you will receive a certificate of completion, which is required when filing for bankruptcy.
- Gather Financial Documents: Organize all your financial documents, including tax returns, bank statements, pay stubs, and any other relevant financial records. These documents are necessary when filling out the bankruptcy petition and providing accurate information about your finances.
- Consider Exemptions: Michigan bankruptcy laws provide exemptions that protect certain assets from liquidation.
More older Americans are filing for bankruptcy nowadays than 25 years ago. Older adults now also compose a greater percentage of all Americans filing for bankruptcy. [4]
The Benefits of Hiring a Dearborn Heights, Michigan Chapter 7 Lawyer
- Expert Guidance: Chapter 7 bankruptcy laws are intricate and can be difficult to understand without legal expertise. Our experienced Chapter 7 lawyers at Frego Law in Dearborn Heights have a deep understanding of the bankruptcy code and can provide you with expert guidance throughout the process. We will educate you about your rights, help you understand the implications of your financial decisions, and guide you through the necessary steps to ensure a successful bankruptcy filing.
- Protection of Assets: One of the main concerns when filing for bankruptcy is protecting your assets. Our Chapter 7 lawyers have a thorough understanding of Michigan's bankruptcy exemptions and will help you maximize your asset protection.
- Reduction of Stress: We will handle the paperwork, communicate with creditors on your behalf, and guide you through the entire bankruptcy process. This allows you to focus on rebuilding your financial future while having peace of mind knowing that you have our skilled legal professional advocating for your best interests.
- Avoidance of Errors and Mistakes: By hiring our Chapter 7 lawyer, you can minimize the risk of errors. We will ensure that all necessary documents are filled out correctly, deadlines are met, and all required information is provided.
- Debt Discharge Maximization: The primary goal of filing for Chapter 7 bankruptcy is to obtain a discharge of debts. Our Chapter 7 lawyers will assess your financial situation and help you navigate the process in a way that maximizes the discharge of your debts. We will analyze your debts, income, and expenses to ensure that you receive the best possible outcome in the bankruptcy process.
The 2018 study found that approximately 63.8% of pro se Chapter 7 filers obtained a discharge (compared with 94.1% of those represented by an attorney) [5]
Frego Lawyers’ expertise, guidance, and protection of assets can help you achieve a successful bankruptcy discharge while minimizing stress and potential mistakes.
If you are considering filing for Chapter 7 bankruptcy in Dearborn Heights, seek the assistance of our experienced bankruptcy lawyers to guide you through the process. Don’t wait, call us today.
Sources:
[1] Bankruptcy filings by chapter U.S. 2022 | Statista. (2023, January 30). Statista. https://www.statista.com/statistics/1118140/bankruptcy-filings-us-chapter/
[2] Cussen, M. P. (2023, June 15). Top 5 Reasons Why People Go Bankrupt. Investopedia. https://www.investopedia.com/financial-edge/0310/top-5-reasons-people-go-bankrupt.aspx
[3] Caporal, J. (2023, January 5). Chapter 7 Bankruptcy and Chapter 13 Bankruptcy Statistics. The Motley Fool. https://www.fool.com/the-ascent/research/personal-bankruptcy-statistics/#chapter-7-bankruptcy-statistics
[4] Zuckerman, A., & Zuckerman, A. (2020, May 26). 80 Bankruptcy Statistics: 2020/2021 Data, Insolvency Factors & Recovery Predictions. CompareCamp.com. https://comparecamp.com/bankruptcy-statistics/
[5] Armstrong, C. (2021, July 12). Why Do So Many Chapter 13 Cases Fail? The Balance. https://www.thebalancemoney.com/why-do-so-many-chapter-13-cases-fail-316195
Received Accolades:
206-2010, 2012, 2014-2021
American Bankruptcy Institute
Certified as a Bankruptcy Specialist by ABC
National Association of Consumer Bankruptcy Attorneys
Better Business Bureau
Office Location
23843 Joy Rd
Dearborn Heights, MI 48127
Monday – Friday : 9:00 am – 5:00 pm
Saturdays : 9:30am – 11:30 in office or by phone
We offer late night appointments as late as 6:30 by phone or in person Mon-Thur.
