Legal Representation from Compassionate Warren Bankruptcy Attorneys

Helping You with Your Legal Issues as You Pursue a Better Financial Future

Do you have more secured or unsecured debt than you feel capable of paying back? Are you facing constant creditor phone calls that border on harassment? Do you need a fresh start financially? If so, you are not alone. Many Michigan residents struggle with that due to unexpected medical bills, credit card debt, mortgage payments, car loans, and more. There is a tendency to shame those in debt, but we believe that this serves no one and is unsympathetic to people across the state struggling with their financial difficulties.

People file for bankruptcy all of the time across the state of Michigan, desperate as they are for some form of debt relief. If you are one of the countless Michigan residents struggling to get out of debt, consider retaining legal counsel from an experienced attorney well-versed in Michigan’s bankruptcy laws.

Our bankruptcy law firm has extensive experience helping clients improve their financial situations with various debt relief options, including bankruptcy petitions. If you want to learn more about the many benefits of filing bankruptcy, we encourage you to contact our law office to schedule a free consultation with a Michigan bankruptcy lawyer today. In your initial consultation, you will be presented with various legal options that could help you improve your financial situation. Don’t hesitate to contact us today.

What Are the Different Types of Bankruptcy in Michigan?

Individuals who are considering filing for consumer bankruptcy have two primary options: either liquidation bankruptcy or reorganization bankruptcy.

Liquidation bankruptcy, more commonly referred to as Chapter 7 bankruptcy, involves selling non-exempt assets and personal belongings to pay off outstanding debts. Chapter 7 bankruptcy provides individuals with a fresh financial start by eliminating and discharging all of their unsecured debts.

Reorganization bankruptcy, also known as Chapter 13 bankruptcy, allows Michigan residents to develop a repayment plan to make scheduled payments in an attempt to settle their debts. Unlike Chapter 7 bankruptcy, Chapter 13 bankruptcy allows you to retain most of your assets as you pay off your debts over three to five years. This type of bankruptcy is most suitable for individuals with a reliable income who can afford monthly payments towards their outstanding debts.

When you contact our legal team, we will review your financial situation and help you determine which option provides the most assured bankruptcy relief.

What Are the Advantages and Disadvantages of Chapter 7 Bankruptcy?

There are several advantages and disadvantages to choosing Chapter 7 bankruptcy.

By filing for Chapter 7 bankruptcy, you receive a fresh start. After the bankruptcy is discharged, you will only owe a debt for secured assets.

Once you file for Chapter 7, the bankruptcy court will grant an automatic stay for your case. This prevents further creditor collection efforts and wage garnishment after you file bankruptcy.

After filing bankruptcy, any wages you earn, or property you require (with the exception of inheritances) are yours to do with what you wish and do not belong to creditors or the bankruptcy court.

No minimum amount of debt is required to file for Chapter 7 bankruptcy. When your bankruptcy case is completed, your debts may be discharged in a matter of three to six months.

Disadvantages of a Chapter 7 bankruptcy petition include the following:

• If you are facing foreclosure on your home, the automatic stay only acts as a temporary defense against foreclosure
• You may lose non-exempt property, such as a motor vehicle or real estate property if Michigan bankruptcy exemptions do not cover them
• The co-signors of a loan could be left handling your debt unless they also file bankruptcy
• You are only allowed to file for Chapter 7 bankruptcy every eight years

What Are the Pros and Cons of Chapter 13 Bankruptcy?

Unlike Chapter 7 bankruptcy, which puts your personal belongings and nonexempt assets at risk of being seized by creditors and bankruptcy trustees, your assets will most likely be protected if you file for Chapter 13 bankruptcy.

Chapter 13 bankruptcy allows you to create a structured payment plan that can allow you to pay back what you owe over three to five years. The exact amount of time will be agreed upon between you and the bankruptcy trustee.

Over the three to five years, you will have no direct contact with creditors. You will need to make one monthly payment to the bankruptcy trustee for distribution to creditors.

Unlike Chapter 7 bankruptcy, where a co-signor may be left vulnerable, they could be protected from having to contend with your debts if you file for Chapter 13 bankruptcy.

Individual debtors with incomes below the threshold may be eligible to file for Chapter 13 bankruptcy in Michigan. However, if their income is above the state median, they may be required to take a means test.

What Are Secured and Unsecured Debts?

Several different types of debt may be discharged through bankruptcy, providing a fresh financial start to the debtor. Unsecured debts that could be discharged by filing bankruptcy include credit card debt, medical expenses, personal loans, payday loans, and more.

Secured debts, which are not so easily discharged, include mortgage payments and car loans.

Not all types of debt are dischargeable through bankruptcy. According to the Michigan Bankruptcy Code, certain debts that are not dischargeable include child support payments, alimony obligations, certain tax debts, student loans, personal injury judgments, and debts incurred through fraudulent activities.

What is the Bankruptcy Process?

When filing with an MI bankruptcy lawyer, you must follow the steps outlined by federal courts to ensure that your case follows the relevant bankruptcy laws. You and your legal representatives will review the necessary documentation to ensure you properly file your bankruptcy petition.

To begin the bankruptcy process, you must gather and organize essential documents, including income statements, tax returns, financial statements, liability records, and personal assets.

Next, you must complete your bankruptcy petition, which requires thorough information about your financial standing, including your debts, expenses, income, and assets. You must be accurate and honest when providing all the requested information.

Once you have completed the bankruptcy petition and prepared all necessary documents, you must file it with the appropriate Warren County bankruptcy court. Once your bankruptcy is filed, an automatic stay goes into effect. From there, you will be required to attend meetings with creditors, and a bankruptcy court will determine whether to discharge your debts.

What Are Common Misconceptions About Filing for Bankruptcy?

Many individuals are misinformed about the complexities and potential ramifications of filing for bankruptcy. This is understandable. Bankruptcy can be daunting and should not be entered into without considering all of your other legal options.

With that said, here are the common misconceptions about filing for bankruptcy in Michigan:

• Bankruptcy will eliminate all of your debts: this is not so. Certain obligations like tax debts, spousal support, child support, and student loans are typically not eliminated by filing for bankruptcy
• Bankruptcy will ruin your credit report forever: not true. Bankruptcy will impact your credit, but it will not cause lifelong damage. Typically, a bankruptcy filing remains on your credit report for a decade
• You’ll lose all of your personal belongings: many exemptions protect certain types of assets, such as your primary residence, car, and other belongings up to a certain value. Bankruptcy will not strip you of everything you own
• Bankruptcy is too expensive: in many cases, the cost of not filing bankruptcy is much higher than the filing fees involved in a bankruptcy case
• You can only file once: while it’s true that there are limits on how frequently you are allowed to file bankruptcy in Michigan, it is possible to do so more than once. The type of bankruptcy you filed and when you filed will determine your eligibility for future filings

What Type of Credit Score Impact Follows a Bankruptcy Filing?

Filing for bankruptcy can indeed hurt your credit score. However, there are ways to mitigate the damage and overcome the situation in the future.

When you file bankruptcy, it will be recorded automatically on your credit report and substantially impact your credit score. However, it will not impact your credit forever. Typically, the length of time that a bankruptcy affects your credit score depends on the type of bankruptcy you select. For example, Chapter 7 bankruptcy will usually stay on your credit report for up to 10 years after the filing date, whereas Chapter 13 bankruptcy usually stays on your credit report for up to seven years.

With long-term financial planning and the help of a Michigan bankruptcy lawyer, it is possible to begin rebuilding your credit after bankruptcy. Please contact our law firm for legal guidance.

Schedule a Free Consultation with an Experienced Bankruptcy Attorney in Warren, MI, Today

If you are contending with insurmountable debt, we encourage you to retain the professional legal representation of a Warren bankruptcy attorney. Our Michigan bankruptcy lawyers have extensive experience assisting clients with the complexities of bankruptcy law and would be proud to represent your interests throughout the process.

Those seeking better financial stability would be advised to consider the various debt relief options available to them, including filing for Chapter 7 or Chapter 13 bankruptcy. We would be proud to lend you legal assistance in these matters.

Schedule a free, no-obligation case evaluation with Warren bankruptcy attorneys at our law firm by contacting our main office at 248-671-6794.