Level One Legal Services, P.C.

Are you a Candidate for Bankruptcy?

A careful evaluation of your personal situation will help you decide whether filing a Chapter 7 bankruptcy in Ann Arbor is right for you. While there is no quick and easy answer, you can ask yourself the following questions:

• Are you frequently late paying your bills?
• Do unexpected expenses cause a serious strain on your finances?
• Do you constantly worry about paying your bills on time?
• Are you behind on any of your debts?
• Has your income decreased in the past six months?
• Have your wages been garnished in the last year?
• Do you find yourself repeatedly borrowing money to pay off your bills?
• Do you owe back taxes?
• Are you unable to make the minimum payment on your credit card bills?
• Have you ever been contacted by a collection agency for unpaid debts?
• Have you recently been contacted at your home or place of business about unpaid bills?
• Has your car been repossessed in the last six months?
• Do you currently have outstanding bounced checks?
• Do you regularly charge small items on your credit cards?

If you answered yes to one or more of these questions, then you may benefit from filing a Chapter 7 bankruptcy. A bankruptcy attorney in Ann Arbor-based Level One Legal Services will help you determine if you are a candidate for this type of relief.

Who Is Eligible for Chapter 7 in Ann Arbor

Means Test

Evaluate your monthly income - compare your current monthly income over the last six months against the median income of a family your size in Michigan. If your income is equal to or less than the median income, you are likely able to file a Chapter 7; or

Deduct expenses - even if your income is greater than the state median, you may still qualify to file if you pass the "Means" test. This is a step-by-step computation of certain monthly expenses deducted from your current monthly income. If, after deducting certain allowed expenses, your income is only at a certain level, then you will may qualify to file Chapter 7. If your income is above the allowed amount, you may have enough disposable income to repay a portion of your debts over a five-year period. If that is the case, you may qualify for a Chapter 13.

Other Considerations

• You may not have filed for a Chapter 7 in the last eight years;
• You may not have filed a Chapter 13 in the last six years;
• It is necessary that you have lived in the jurisdiction where your case will be filed for most or all of the 180 days or more prior to filing; and
• Cash advances or charges for the purchase of luxury goods or services, taken on credit cards within 90 days of filing are not dischargeable.

How To File

1. Gather certain documents - when you meet with your Level One attorney, you will need a number of personal documents as your bankruptcy Petition and Schedules require a description of your property, income, living expenses, debts, money spent and real property owned and sold within the last two years. We will carefully review your personal circumstances and advise you if you qualify for a Chapter 7 bankruptcy. Our fees and flexible payment options will be explained to you, the Retainer Agreement signed and a payment made. As the Bankruptcy rules require that you complete a Credit Counseling course prior to your filing, we will provide you with a list of agencies from which to choose. This may be done over the phone or on-line. It will cost $30 - $60 and takes only about an hour. You will receive a Certificate of Completion, which we will include with your filing.

2. Credit report - we will order a copy of your credit report to insure that it properly identifies your creditors. Your attorney will then prepare the required paperwork. We ask that you advise us immediately if there is any new information relevant to your income or financial circumstances so we can include it in your Petition and supporting documents.

3. Review - you will then review your documents for accuracy and to be sure that we have included all of your debt and asset information. If everything is accurate, you will sign the Petition, pay the balance of your fee to Level One Legal Services and the court filing fee of $299.

4. Filing - Level One will then file your Petition and Schedules, which begins your bankruptcy case. A case number and Trustee will be assigned and the Automatic Stay will be issued preventing all collection activities by your creditors. The court notifies your creditors of your bankruptcy filing by mail. After we receive notice of your Trustee, we then provide the Trustee with documentation to show you are qualified for the relief offered by a Chapter 7 bankruptcy. The Trustee will review your case for accuracy and determine if there are any assets available to satisfy your debts.

5. "Meeting of Creditors" - this hearing will then be scheduled by the court, usually within one month of filing your case. This short meeting is conducted by your assigned Trustee and your creditors are invited to attend but usually do not. One of our attorneys will attend this hearing with you. The Trustee will ask you a series of questions to confirm the information you have provided in your Petition and Schedules and may ask you to provide additional information.

6. The Bankruptcy Code also requires that you complete a Debtor Education course prior to receiving your discharge. This is simply a personal financial management course intended to inform you of ways to plan your future budget to avoid financial mistakes.

7. Discharge - you will usually be notified of your discharge within 60 - 90 days of your Creditor's Meeting by receiving a court order advising you that your debts have been discharged. This means that your creditors may not pursue you to collect on those debts that have been discharged, or dismissed, by the court.