Chapter 7 Bankruptcy — A True Fresh Start
Wipe out qualifying unsecured debt in 3–6 months. Keep most or all of your property under Michigan exemptions.
What Chapter 7 Is
Chapter 7 is sometimes called "liquidation bankruptcy," but in Michigan most filers don't lose anything. The trustee reviews your assets, your exemptions protect what you own, and qualifying debts are wiped out — usually within 3 to 6 months from filing. It's the fastest path to a fresh financial start for people who qualify.
Who Qualifies — The Means Test
The Means Test compares your household income to Michigan's median for your family size. Most clients who come to Robert are well within the threshold. If you're close to or above it, there's a second calculation involving allowed expenses — and Robert has helped many "above-median" clients qualify.
Do You Likely Pass the Michigan Means Test?
A starting-point estimate using current Michigan median income. Final eligibility depends on a full expense calculation Robert handles for you.
Michigan median for a household of 2: $79,847 · you're $19,847 below. You generally qualify for Chapter 7 outright.
What Happens to Your Property
- • Your home (up to $40,475 equity)
- • One vehicle (up to $3,725 equity)
- • Household goods & furnishings
- • Clothing
- • Tools of your trade
- • Retirement accounts (generally fully exempt)
- • 60% of recent wages (75% if head of household)
- • Equity above the homestead exemption
- • Vacation properties / second homes
- • Luxury items, high-value collectibles
- • Investment accounts (non-retirement)
- • Recent large cash transfers
- Credit card debt
- Medical bills
- Personal loans
- Most old utility bills
- Old payday loans
- Deficiency balances on repossessed property
- Most student loans
- Child support & alimony
- Recent income taxes (under 3 years)
- Criminal restitution
- Debts from fraud
- Most government fines
The Chapter 7 Process
- 1Free consultation with Robert
- 2Complete required credit counseling
- 3File the petition (automatic stay begins)
- 4341 Meeting of Creditors (~30 days later)
- 5Complete debtor education course
- 6Discharge — typically 60–90 days after the 341 meeting
- • Fast — often discharged in under 6 months
- • Wipes out most unsecured debt completely
- • Stops garnishments and lawsuits immediately
- • No repayment plan to manage
- • Income limits via the Means Test
- • Can't catch up on missed mortgage payments
- • Stays on credit report ~10 years
- • Non-exempt property may be sold
Real Washtenaw County Scenarios
These composite examples (details changed for privacy) reflect the kinds of cases Robert files most weeks.
What Chapter 7 Actually Costs
The biggest unknown for most people is the price tag. Here's an honest breakdown of what a typical Washtenaw County Chapter 7 case looks like financially:
What Happens at the 341 Meeting
The 341 Meeting of Creditors is the only mandatory appearance in a typical Chapter 7 case. In the Eastern District of Michigan, these are now held by Zoom video (occasionally telephone). The trustee asks routine questions to confirm your petition is accurate — usually it lasts 5 to 10 minutes. Despite the name, creditors almost never appear. Robert sits with you on the call.
- • Did you read and sign the petition? Is everything accurate?
- • Have you listed all your assets and all your debts?
- • Have you filed all required tax returns?
- • Has anything changed since you filed?
- • Do you anticipate inheriting money in the next 6 months?
Common Mistakes That Delay or Derail a Chapter 7
Michigan-Specific Notes
Michigan is an "opt-out" state, which means filers must use Michigan's exemption system rather than the federal set. Michigan's homestead exemption is one of the more generous in the Midwest, and the wildcard exemption (up to $1,250 plus any unused homestead) gives flexibility for non-exempt assets. Eastern District of Michigan cases are filed electronically and Robert handles the filing, the trustee communications, and the 341 meeting from start to finish.
Chapter 7 FAQs
Ready to Talk? Robert Answers His Own Phone.
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📞 Call (734) 662-1590