- Chapter 7 at a glance
What it is
A discharge of most unsecured debt, not a payment plan
Stops
Wage garnishment, collection calls, lawsuits, frozen bank accounts
How long
About 4 months from filing to discharge
Wipes out
Credit cards, medical bills, personal loans, most old judgments
What you keep
Property protected by Michigan or federal exemptions
Cost to start
From $1,499 down for single filers
- Current Pricing
$1,499
down to start, single filers
4
months, filing to discharge (approx.)
$338
court filing fee
What Chapter 7 actually does
Chapter 7 is the bankruptcy most people picture: the court discharges your qualifying debts and you stop owing them. There is no monthly plan payment. A trustee reviews your case and checks what you own against the exemptions, and in most consumer cases finds nothing to sell.
The automatic stay starts the moment the petition is filed, so garnishments, collection calls and lawsuits stop while the case runs.
What it wipes out
Chapter 7 discharges most unsecured debt, including:
- Credit card balances
- Medical bills
- Personal and payday loans
- The balance left after a repossession
- Most old judgments and collection accounts
Some debts survive a Chapter 7: child support and alimony, most student loans, recent income taxes and criminal fines. We go through your list line by line on the first call so you know what goes and what stays.
Will I lose my house or my car?
Most Chapter 7 filers keep everything they own. Michigan lets you choose between the state and federal exemptions, which protect household goods, retirement accounts, a vehicle up to a set value and home equity up to a limit.
To keep a financed car or house, you keep paying the loan. Where your equity is more than the exemptions cover, Chapter 13 is usually the better route, and we will tell you that before you file.
If a repossession or sheriff’s sale is scheduled, call rather than filling in a form. Timing decides which options are still open.
Do I qualify? The means test
Chapter 7 is available if your household income is below the Michigan median for your family size. If it is above the median, a second calculation looks at your actual expenses to see whether you have money left over to repay creditors. Many people above the median still qualify.
You can file Chapter 7 once every eight years. We run the means test on the first call, before you commit to anything.
How long it takes
- You complete a short credit counseling course and gather your documents.
- We file the petition. The automatic stay takes effect the same day.
- About a month later you attend the 341 meeting of creditors, with Jesse beside you.
- Around two months after that meeting, the court issues your discharge.
What it costs to start
Chapter 7 starts from $1,499 down for single filers. The court filing fee is separate.
You should not have to book a consultation to find out what something costs. That is why the figures are on this page.
Chapter 7 or Chapter 13?
The two chapters do different jobs. This is the short version.
| Question | Chapter 7 | Chapter 13 |
|---|---|---|
| What it is | Not a payment plan | A repayment plan |
| Your property | In some cases you can lose property | You keep your stuff |
| Duration | About 4 months | 36–60 months |
| Cost to start | From $1,499 down, single filers | From $0 down, W2 employed |
| Unsecured debt | Most of it discharged | Usually pennies on the dollar |
| Mortgage arrears | Not addressed | Caught up through the plan |
| On your credit | 10 years | 7 years from filing |
Find out what your case costs
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