Thousands and thousands in Michigan are debt free now. People who are probably a lot like you: Overwhelmed by debt, being garnished, losing their house, utility shut-off notices, lawsuits, creditor harassment, and foreclosure. The list goes on.  They made the right decision for themselves, their families, and their financial future and they filed for bankruptcy. Do you have bills you can’t pay or are you behind on your house or car payments? I can help.

Chapter 7 Bankruptcy

Also called a “straight” bankruptcy, it is fairly straightforward. File a voluntary bankruptcy petition, show your income, expenses, assets, debts, and the last couple of years of financial history and the Bankruptcy Court will discharge your debt. It’s not as scary as you may think it is especially with the help of an experienced and qualified lawyer.

This is the most common type of bankruptcy. It does not require you to repay any of your discharged debts. Most debts are eliminated but there are some exclusions. While Chapter 7 wipes out credit cards, medical bills, old utilities, personal loans, lawsuits, judgments, and other debts like these, it does not eliminate child support, spousal support, student loans, recent tax debt or fraudulent debts. We will help you understand what debt you can expect to have discharged so you can better plan your financial future.

Once you file for bankruptcy, the automatic stay goes into effect. This gives you the breathing room you need. The stay stops all creditor activity, telephone calls, collections, lawsuits, garnishments, and foreclosures. Your creditors cannot do anything outside of bankruptcy court to collect debts or harass you.

Most of my clients get to keep all their stuff, their house, their cars, tax refunds, everything. The Federal exemptions are pretty generous and, while the laws are designed to help people that are broke, they are not designed to make you poor. We will maximize your exemptions to protect most, if not all, of your property.

About a month after your case is filed, you will attend a Meeting of the Creditors where a Chapter 7 Trustee will ask you questions about your situation and any property you own. It usually takes about five minutes. Assuming there are no issues, you will get an Order of Discharge about two months after the Meeting. Every single Chapter 7 case we have filed has received a discharge.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is the wage earner’s plan in which the debtor reorganizes finances and proposes a repayment plan to repay some or all of their debt over a three to five year period. You must have a reliable source of income to fund the repayment plan. The classic example of a Chapter13 is filing to save your house from foreclosure and force the bank to allow you to catch up any arrears.

It seems most of my clients want to file a Chapter 7 and not file a Chapter 13 but, if your income is high enough, the Court will expect you to make your best efforts to repay something to your creditors. It doesn’t have to be all of the debt but you have to make your best efforts to pay as much as you can.

Why would you file a Chapter 13? Here are nine good reasons that you won’t find in a Chapter 7:

  • You can dismiss your Chapter 13 if you change your mind.
  • Your attorney fees can be paid after you file your case.
  • You may be able to get rid, or lien strip, second mortgages and equity lines.
  • You get to keep all of your property.
  • You can change the interest rate on your car payment.
  • You can catch up your late house or car payments.
  • Penalties and interest on unpaid income tax debt stops.
  • IRS debt is paid in full before your credit cards get paid.
  • Divorce judgment debts to an ex-spouse can be resolved.

Not every bankruptcy law office does Chapter 13s. Since we do, we will take the time to fully discuss all of your options and help you determine the best Chapter of relief available to you. To find out more about each and the differences, read The Bankruptcy Book from the privacy of your computer or please contact us to set up a no-obligation consultation to learn more about your choices.