Bankruptcy is a way for you to stop creditor collection efforts and possibly to discharge many of your debts. Although people with any level of income can require bankruptcy protections, the most aggressive and fastest form of bankruptcy is only available to those with a household income lower than the state median where they qualify to file.
Chapter 7 bankruptcy does not require that you try to repay your creditors through a repayment plan like Chapter 13 requires, although it may require that you liquidate some of your assets to pay them off before your discharge. Still, you won’t have to spend three to five years making payments like you would in a Chapter 13 filing. How do you know if you can qualify for a Chapter 7 bankruptcy in Michigan?
What is the median income in Michigan?
If you are the only person in your household, you can have an adjusted annual income of as much as $53,815 and still qualify for Chapter 7. Those in two-person households can have up to $67,015 in income, while three people in the family will increase the income limit to $80,465. If you have four total family members, you can qualify with up to $99,179 in income, and you can add another $9,000 to that for every additional family member beyond the first four.
Chapter 7 bankruptcy can be an excellent option for someone who are experiencing a temporary downturn in income or who does not have substantial personal assets at risk. The better that you understand Chapter 7 bankruptcy, the easier it will be to choose the right kind of bankruptcy for you.