There is one form of bankruptcy that Michigan residents struggling with personal debts can turn to in order to have most -- if not all -- of debts wiped clean as soon as their bankruptcy petitions receive court approval. Chapter 7 bankruptcy law has many benefits. Of course, it is not perfect. Here are some things to consider before filing a Chapter 7 petition.
What are some of the consequences tied to a Chapter 7 bankruptcy? This type of debt relief is often referred to as a liquidation bankruptcy. Once approved, the petitioner may have to sell property to pay back debts. The filing will stay on one's credit report for up to a decade, which can make getting any lines of credit or loans difficult. Finally, it will not clear all types of debt, meaning one may still be responsible to make payments to certain creditors even if they lack the funds to do so.
What are some of the benefits to this type of bankruptcy? The biggest benefit is quick debt relief. Some property is exempt from the bankruptcy, meaning one will not lose everything. It can also stop creditor harassment. Finally, one can start to rebuild his or her credit profile as early as one year following bankruptcy approval.
Michigan residents who are considering Chapter 7 bankruptcy law to help them with their debt woes need to weigh the positives and negatives for doing so. For some individuals, it will be the right fit; for others, it won't. An experienced bankruptcy attorney can review one's situation and -- if it is thought appropriate -- help pursue this type of debt relief.
Source: FindLaw, "Pros and Cons of Declaring Bankruptcy under Chapter 7", Accessed on May 30, 2018