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Contact David Lutz directly for fast answers to your Bankruptcy Law Questions at the Office at (248) 624-5500, on his cell phone at (248) 535-2520, or by email at david@ambroselawgroup.com. [updated]
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| CHAPTER 7 |
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What Does a Chapter 7 Bankruptcy Do? |
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Chapter 7 Bankruptcy is used to drastically reduce your debt, eliminating credit card balances, law suit judgments, and medical bills. You can get rid of homes and cars that you owe money on with no repercussions.
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Who Should File a Chapter 7 Bankruptcy? |
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- People with high credit card balances that they can’t afford to pay.
- People who owe large medical bills.
- People who have lost law suits that they can’t afford to pay.
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Who Should Not File a Chapter 7 Bankruptcy? |
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You should not file a chapter 7 if you want to keep your home or car but are behind on payments because you may not be able to keep those assets. If you want to keep your home or car, you should consider a Chapter 13 Bankruptcy
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A FRESH START
Unlike a Chapter 13 Bankruptcy, a Chapter 7 Bankruptcy does not require a payment plan. The debts that are discharged are eliminated. Of course, some debts cannot be discharged, and you may decide to keep paying for something like your car. Keep in mind that this option is not available to everyone. A “means test” is used to determine if you qualify. Your attorney will be able to consult with you on which plan is feasible.
CLICK FOR “WHAT NOT TO DO BEFORE BANKRUPTCY” |
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WHAT IS A CHAPTER 7 BANKRUPTCY |
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The essence of a Chapter 7 Bankruptcy is that after each month, when you have paid your basic living expenses, you do not have enough money left over to pay your debts. In these cases, debt is eliminated upon successful completion of your case, usually within 4 months from the time you file. You are usually able to keep your home and cars, depending on the circumstances. If not, we will discuss options other than a Chapter 7 Bankruptcy.
Click on the image below for our Questinairre. Completing this before your first consultation will ensure that your case can be filed quickly. If you have trouble completing any of the items, we will be happy to assist you.
Click for Questionairre
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Some basic living expenses include:
- Home Payments, including taxes and expenses
- Car Payment
- Child Care
- Utilities (Electric, Gas, Telephone, Cable, Water)
- Home Maintenance
- Laundry and Dry Cleaning
- Medical and Dental expenses
- Life Insurance
- Health Insurance
- Auto Insurance
- Alimony and Child Support
- Business Expenses
- Recreation
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WHAT DO I BRING TO OUR FIRST MEETING? |
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(Bringing these is not mandatory but would make you initial consultation more productive.)
- Bring proof of income for the last 6 months. This would include regular pay, social security payments, disability, unemployment, and bonuses.
- Think about your monthly budget and average spending, without including credit card debt. List this if possible.
- Bring your last 6 months of bank statements and your last 401k and IRA statement.
- Your last billing statement for your mortgage, car payment, or any other property that you make regular payments on.
- Go to www.annualcreditreport.com, request your free credit report, and bring it to the meeting.
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DOCUMENTS TO BRING IN THE FUTURE |
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At some point, you will also need to bring copies (not the originals) of the following: |
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- Driver’s License or Identification.
- Social Security Card (If you need a new card, visit www.socialsecurity.gov or call 1-800-772-1213)
- Income Tax Returns and W2 Forms for the previous 2 years.
- Wage Stubs for the last month. We also need to know your income for the last year, and your income for the last several years from tax or W2 statements
- Proof of Insurance and Registration for all cars
- Copies of all leases on apartments and cars.
- Credit Card and Medical Bills
- Monthly Expenses: Mortgage, taxes, car payments, insurance, food
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Here’s how we calculate your average income: |
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- We calculate your income total over the last 6 months up to the last date of the last month before filing for Bankruptcy. For example, if you file on December 15, we calculate from June 1st to November 30.
- Income includes any support, social security, pension, or other income sources (someone paying your living expenses or a roommate).
- Income also includes bonuses at work, commissions, special payments, tax refunds, lottery winnings or gambling in general.
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If You Own Land, we need: |
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- Property Tax Statement- It shows the Taxable Value and the State Equalized Value (SEV).
- Appraisal- If it’s recent or to strip your 2nd mortgage. You need this if you have had your property appraised.
- All Recorded Deeds, Mortgages, and Land Contracts that you received when you bought the property or a Title Certifcate if it’s a manufactured home.
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THE CASE |
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Meeting of Creditors |
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The first time you will be in a formal setting will be at the “341 Meeting of Creditors”. The trustee places the debtor under oath and asks you some questions. Any creditor can choose to be present and also ask any questions. Judges are not present. This is the time for creditors or the trustee to either agree to a payment plan or to discuss why the plan might not work. No Judge is present, and the setting is a hearing room, rather than a courtroom. |
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