At
MichiganBankruptcyLawyer.com our personal bankruptcy
lawyers are ready and available to help you get relief from your
debts. If you are a consumer that is overburdened with debt and
see no way out, you may want to consider filing for personal or
consumer bankruptcy. A personal bankruptcy lawyer can help you
with the mountains of paperwork and provide you with the quality
legal advice and representation you need to navigate through
complicated bankruptcy proceedings.
The chapters for consumer bankruptcy filings are Chapter 7
and Chapter 13, and in rare instances, Chapter 11. Because the
instances of individual consumers filing for Chapter 11
bankruptcy are so rare, we only cover Chapter 7 and 13 on this
page.
Filing for personal bankruptcy under Chapter 7 and Chapter 13
will stop creditor harassment and will generally stop wage
garnishments, depending on the reason for wage garnishment. For
example, if your wage is garnished because you have to pay child
support or criminal restitution, that wage garnishment will
continue. However, if your wage is being garnished to pay an
unsecured debt, like a credit card, the wage garnishment will
cease.
Bankruptcy law is a set of federal laws and statutes
governed by Title 11 of the United States Bankruptcy Code.
However, each state also has laws that the bankruptcy courts
follow in regards to debts and property ownership. My
office only handles Michigan Bankruptcy cases, so if you
live outside Michigan, you need to consult with a
bankruptcy lawyer in your state for more information on how
you should file and what to expect. For example, a number of
states have a homestead exemption which exempts the value of
your primary home from debt collectors. However, the value
that these states allow varies.
The following is general information to help you make an
informed decision on which Chapter you should consider filing
under before coming to
MichiganBankruptcyLawyer.com
Click here to download the
Voluntary Petition (B1) for all bankruptcy types.
Chapter 7 bankruptcy (straight bankruptcy) is a liquidation
proceeding. The debtor turns over all non-exempt property to
the bankruptcy trustee who then converts it to cash for
distribution to the creditors. The debtor generally only has to
attend an initial meeting with the trustee and maybe a discharge
hearing (depending on your state). The matter is then quickly
handled and the debtor receives a discharge of all debts
determined by the court to be dischargeable usually within four
months, which means that the debtor no longer has the pay the
debts that are discharged.
Chapter 7 is frequently the option for people who have few or
no assets, often little or no income, and a lot of debt. In
short, Chapter 7 is for the debtor who, after paying the monthly
expenses for necessities, simply does not have enough money to
pay the remaining monthly debts.
To file for a Chapter 7 bankruptcy you must:
- Reside or have a domicile, a place of business, or
property in the United States or a municipality;
- Not have been granted a Chapter 7 discharge within the
last 8 years;
- If you previously filed under Chapter 13 you must have
paid at least 70% of your debt;
- You must not have had a bankruptcy filing dismissed for
cause within the last 180 days;
- Your monthly income must be below your state's median
income level, or, you must be unable to pay $100 per month
towards your outstanding debt;
- For both Chapter 7 and Chapter 13 you must have filed
your federal income taxes for the previous year unless your
were not required.
Generally speaking, your debts will be discharged with the
following exceptions: taxes, spousal and child support, debts
arising out of willful misconduct (like fraud, conversion or
embezzlement) and/or malicious misconduct by the debtor,
liability for injury or death from driving while intoxicated,
nondischargeable debts from a prior bankruptcy, student loans,
criminal fines (including restitution) and penalties and
forfeitures.
It depends on whether the Chapter 7 Trustee determines if
your case is a "No Asset Case" or an "Asset Case." Only cases
determined to be "Asset Cases" involve the liquidation of
property you have. An Asset Case is a case in which the trustee
determines property with a non-exempt value is in excess of the
secured debt. In these cases, the assets are liquidated and the
proceeds from the sale are used to pay the creditors. If you
have assets that are considered non-exempt that you want to
keep, you may want to consider filing a Chapter 13 bankruptcy
instead of a Chapter 7. Contact
MichiganBankruptcyLawyer.com to discuss the advantages
and disadvantages of each, so you can determine which will work
out the best for you.
Chapter 13 (also known as the "wage earner bankruptcy",
"individual debt adjustment", "individual debt consolidation",
or "repayment plan") is a way for individuals who have a steady
income to pay their debts over a court-approved period of time,
generally 36 to 60 months (3 to 5 years). Any individual is
eligible to file for Chapter 13 as long as their unsecured debts
are less than $307,675 and secured debts are less than $922,975.
Chapter 13 bankruptcies take longer than Chapter 7 filings
and may involve a number of hearings over an extended period of
time with both the trustee and the court. Chapter 13 is
generally the only option for people who have a predictable
income and whose income is sufficient to pay their reasonable
expenses with some left over to pay their debts, and for those
who have non-exempt property they want to keep.
In a Chapter 13 bankruptcy, secured creditors (those holding
liens or security interests in homes, cars, furniture or other
collateral) are repaid in full, or in certain circumstances,
receive a percentage of the full amount owed by the
debtor—sometimes as little as 30 to 50 cents on the dollar.
Chapter 13 is a good option for people who have a lot of
equity in their homes, have a home in foreclosure or one that is
about to foreclosed, or if they have nondischargeable debts such
as alimony, child support, student loans or taxes, or if they
need to lower payments to creditors and to extend the period of
repayment when creditors won’t agree to the reduction or
extension. It provides debtors with relief from losing their
homes, risking IRS or State taxing agency levies, wage
garnishments, liens and other methods utilized by creditors to
collect on their debts. Contact a
MichiganBankruptcyLawyer.com to see if Chapter 13 is a
good option for you.
New bankruptcy court fees went into effect January 1, 2007.
The current court fees for filing a Chapter 7 bankruptcy are
$299, to file a new Chapter 13 bankruptcy the filing fee is
$274. If you are converting an existing bankruptcy case from
Chapter 7 to Chapter 13 or from Chapter 13 to Chapter 7 you will
not be charged an additional fee. You may also have to pay
other court costs, as well as attorney fees.
Unfortunately, yes. The fact that you have filed for
bankruptcy (Chapter 7 or Chapter 13) is normally carried on your
credit records for 6 to 10 years, and sometimes longer. Future
lenders consider your bankruptcy when deciding whether to loan
you money. You probably will end up paying a higher interest
rate on your loan than someone who’s never filed for bankruptcy,
or you may be turned down altogether because the lender may
consider you too great a credit risk. However, certain laws
exist to prevent unlawful discrimination against you just
because you filed for bankruptcy.
An experienced bankruptcy attorney may be helpful.
MichiganBankruptcyLawyer.com will help you properly fill
out the paperwork and navigate the complicated bankruptcy
system, most bankruptcy laws are very specific. An attorney may
increase your chances of getting the debt relief you need to get
on your feet financially. An attorney can also help in the
required creditors' conference all debtors must attend before
the court will hear the case.
