Q: I own a construction business and am recently divorced and have lots credit card debt which bankruptcy do I need?
most debt is personal debt, do I have to sell trailers and tools to cover my debt?
A:
Your options for personal bankruptcy come in basically two flavors: Chapter 7 liquidation or Chapter 13 repayment plan. If you are eligible for it, most bankruptcy lawyers will try to file you under a Chapter 7 case, unless there is a reason Chapter 7 wouldn't be best for you. So let's look at how some of that might play out:
You can file Chapter 7 bankruptcy if your household income from all sources is less than the state median. If it's above, you'll need to take a means test to find out if you can file Chapter 7. Assuming the means test qualifies you for Chapter 7 bankruptcy, then you would then look at whether you have any assets you would be forced to turn over in the Chapter 7 bankruptcy. For example, your trailers and your tools. Both federal and Michigan law give you allowances to keep a certain amount of property, known as exemptions. If you have property worth more than you're allowed to keep using your exemptions, you'll need to turn it over in a Chapter 7 bankruptcy. If you don't want to turn that property over, then off to Chapter 13 land we go.
You can file Chapter 13 bankruptcy if you have regular income and debts less than $419,275 unsecured, and $1,257,850 secured. In a Chapter 13 bankruptcy you pay your unsecured creditors as much as the law says you can afford to pay over a term of 36 to 60 months. In exchange for successfully making all of your payments, you can get a discharge regardless of whether your unsecured creditors are paid in full or not.
So the answer for you: it depends on your income, and it depends on whether you have property that would not be exempt in a Chapter 7 case. You should contact a bankruptcy lawyer in your area who can go over all the facts and circumstances in your case, and who can give you your options. He or she would review your eligibility for Chapter 7 or Chapter 13 bankruptcy, and would be able to discuss with you which route is right for your situation. Hope this helps. Good luck.
A: You shoukd consult an attorney who can review your entire financial situation and help you decide between a 7 and 13.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
