For many Michigan residents, bankruptcy is a last resort when it comes to dealing with insurmountable debt. If you’re considering filing for bankruptcy, you’re likely wondering what will happen to your assets and whether you’ll be able to rebuild your credit once the bankruptcy process is complete.
What is bankruptcy?
Bankruptcy is a legal process that allows individuals or businesses to reorganize or liquidate their assets in an effort to repay creditors. There are two main types of bankruptcies: Chapter 7 and Chapter 13. Chapter 7 bankruptcies are also known as “liquidation bankruptcies” because they involve the sale of nonexempt assets in order to repay creditors. Chapter 13 bankruptcies, on the other hand, are known as “reorganization bankruptcies” because they involve creating a repayment plan to repay creditors over a period of time that’s usually between three and five years.
Once you’ve filed for bankruptcy, an automatic stay will go into effect, which means that creditors are prohibited from contacting you or taking any action against you. At the same time, you’ll have to attend a meeting of creditors, during which your creditors will have an opportunity to object to your bankruptcy discharge. If there are no objections, you’ll be granted a discharge, which means that you’ll be released from all debts that were included in your bankruptcy petition (with some exceptions).
What does it mean to have a bankruptcy discharged?
Being discharged from bankruptcy simply means that you’ve completed the bankruptcy process and that your debts have been wiped clean. Once you’ve been discharged, your creditors will no longer be able to contact you or take any action against you. This can provide much-needed relief for people who are struggling with debt.
Bankruptcy may be a financial lifeline
If you’re considering filing for bankruptcy, it’s important to understand what it means to be discharged from bankruptcy. Once you’ve been discharged, all of your debts will be wiped clean and your creditors will no longer be able to contact you or take any action against you. If you’re struggling with debt and looking for a fresh start, bankruptcy may be the right option for you.