Are there different types of Chapter 7 Bankruptcy?

Yes, there are different types of Chapter 7 Bankruptcy in Michigan. When filing a Chapter 7 Bankruptcy a debtor must choose one of the following three filing types: liquidation, wage earner, or a combination of the two. Liquidation Chapter 7 Bankruptcy is when debtors are unable to repay all of their debts. In this case, the court requires the debtor to liquidate or sell any non-exempt assets in order to pay off creditors. The debtor’s remaining debt is then discharged, meaning they no longer have to pay it. The second type of Chapter 7 Bankruptcy in Michigan is a Wage Earner Plan. This type of filing is for individuals with a steady income who are able to pay some on their debts, but not all of them. Under this plan, debtors may propose a repayment plan that they can afford over three to five years. After completing the plan, the court will discharge any remaining debt. Finally, the combination of liquidation and wage earner is a plan for debtors who want to make some payments on their debts, but also need to liquidate some assets to pay off their creditors. The court looks at the debtor’s individual circumstances and then approves or denies the plan. Overall, individuals filing for Chapter 7 Bankruptcy in Michigan have three different options to choose from: liquidation, wage earner, and a combination of the two. Each option has its own advantages and disadvantages, which should be evaluated closely before making a decision.

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Are there different types of Chapter 7 Bankruptcy?

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