DETROIT BANKRUPTCY LAWYER
Are you struggling to pay your debts or deciding between which debts to pay on time? Are creditors threatening to repossess your car, foreclose on your house, garnish your wages or seize your bank accounts? Is your business at risk of closing? If you answered yes to any of these questions, filing bankruptcy in Michigan may be a good solution and provide necessary relief from the stress of creditor threats and intimidation.
Successfully completing bankruptcy can discharge some or all of your debts. You may also be able to keep your property depending on your personal circumstances. Bankruptcy also provides an automatic stay which stops creditors from taking action to collect debts after you file your bankruptcy petition and for a period of time while it is pending. The two bankruptcy options for consumers are generally Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
Consumers can get a fresh start and stop creditor collection efforts by filing a Chapter 7 bankruptcy. Some property may be exempt from creditors. There is no payment plan and creditors may not collect from the consumers post-bankrutpcy income. Debtors must pass a means test to qualify.
Chapter 13 Bankruptcy
Consumers with a regular income can keep their property by preparing a payment plan under Chapter 13 bankruptcy. Chapter 13 allows consumers who are behind on mortgage or car payments to cure a default over the course of the plan, which may last 3 or 5 years. Chapter 13 is also an option for consumers who do not qualify for a Chapter 7.
Chapter 11 Bankruptcy
Small businesses that are struggling to pay creditors may benefit from the small business provisions of a Chapter 11 bankruptcy. The business prepares a bankruptcy plan and pays creditors from future earnings. The US trustee oversees the debtor's progress and the debtor keeps control of the business while the plan is being performed.
Bankruptcy Chapters and Considerations
What is Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy is a liquidation bankruptcy. Filing Chapter 7 is a bankruptcy option for individuals and businesses. Filing Chapter 7 bankruptcy can eliminate repayment of all dischargeable debts. Creditors are paid from non-exempt assets of the estate. Secured creditors generally will reclaim their property if a debt is owed and unpaid. Unsecured creditors are paid out of non-exempt assets after secured creditors, with priority claims being paid in order before general claims.
The extent to which creditors are paid depends on the available assets at the time of the bankruptcy. Assets acquired after the bankruptcy filing, including income earned and paid, generally is not subject to creditor claims that exist prior to the bankruptcy filing. Other factors must be considered including whether debts are non-dischargeable, whether pre-bankruptcy transfers must be voided, and if exemptions are available to allow a debtor to keep property.
Compared to filing Chapter 13, an individual debtor in Chapter 7 may have to sell or give up certain property to the bankruptcy trustee, but will get a fresh start after the bankruptcy is approved. In many cases, a debtor filing Chapter 7 in Michigan will not lose property because of property exemptions under the Bankruptcy Code.
A corporate or company debtor liquidates and goes out of business as part of a Chapter 7 filing. A Chapter 11 reorganization is available to business entities (and in some cases individuals) to reorganize debts and continue the business operations.
What is Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy in Michigan allows individual debtors to keep their property and prepare a plan to pay creditors based on future available earnings. A Chapter 13 plan may last three or five years depending on the debtor's income. The main benefits of filing Chapter 13 bankruptcy include broader debtor protections to keep a personal residence, car or other assets that might otherwise be liquidated in a Chapter 7 filing. A debtor is allowed more flexibility to cure prior missed payments to creditors and pay other current living expenses. Drawbacks of a Chapter 13 generally include a requirement to pay priority claims in full during the life of the plan and ongoing monitoring by the U.S. trustee until the plan is completed. A debtor must also have a regular income to file under Chapter 13.
Will You Lose All of Your Property If You File Bankruptcy in Michigan?
No. Bankruptcy law provides debtors with exemptions that allow debtors to keep certain property. The exemptions allowed are listed by asset type and may be limited to a certain asset value. A debtor may be allowed to keep exempt property or the value of that property. Debtors considering bankruptcy will need to carefully analyze what exemptions they qualify for and can utilize to protect and keep property. Importantly, Chapter 13 allows a debtor to keep all his or her property, but creditors may receive more payments under the repayment plan and the debtor must successfully complete the repayment plan to keep the property.
Which Bankruptcy Chapter is Right for Me?
Chapter 7 and Chapter 13 are the most utilized bankruptcy code provisions. Chapter 7 provides a "fresh start" but requires a liquidation of non-exempt assets and may not protect a debtor's home or car. Chapter 13 requires a plan that includes payments to certain priority creditors during a three or five year repayment period. Chapter 7 does not require a plan, but may not protect a home or car from foreclosure or repossession. Depending on your goals and personal situation, a careful analysis is required to determine filing eligibility under Chapter 7 and Chapter 13, and which bankruptcy chapter will help you best accomplish your goals.
I'm retired and living on a fixed income - can I benefit from filing bankruptcy?
Yes. Bankruptcy in Michigan provides exemptions for certain retirement accounts that creditors cannot seize. If you complete a bankruptcy filing, a discharge of debts would allow you to use your retirement income for necessary living expenses. The bankruptcy exemption for a personal residence increases for individuals age 65 and older, which helps protect equity in your home. Future income may not be subject to creditor demands, so you can live without fear that creditors will take your retirement. Bankruptcy under Chapter 13 also allows a debtor to pay living expenses, so not all future income would go to creditors.
How Much Does Filing Bankruptcy in Michigan Cost?
At Steiger Tax Law, most consumer bankruptcy clients filing a Chapter 7 or Chapter 13 will qualify for a flat fee. Steiger Tax Law charges a flat Chapter 7 fee of $750 and a Chapter 13 fee of $2,000. All court costs are separate from the flat attorney fee. If litigation is required to eliminate liens or security interests, that quote may be separate and will be discussed with the client prior to filing. At Steiger Tax Law, fee transparency is important to establishing client trust and there are no hidden fees. Steiger Tax Law offers flexible fee arrangements as permitted by the bankruptcy courts to assist clients in filing their bankruptcy petitions and regaining control over their finances.
Can You File Bankruptcy Yourself in Michigan?
By some estimates, about 5% of cases are filed pro se or by debtors who prepare and file the bankruptcy forms. Some may have filed a bankruptcy previously and so understand the process and requirements. Filing bankruptcy takes time and careful analysis. Preparing and filing forms and submitting them to the court may be challenging but not impossible. The bankruptcy court will not provide pro se filers with legal advice. Hiring a bankruptcy attorney is generally a good idea to review all options and help a debtor understand what debts may and may not be eliminated or discharged in bankruptcy. While it may be difficult to pay a fee in Chapter 7 bankruptcy, reaching out to an attorney before you face foreclosure or garnishment may dramatically improve your odds by providing advice to pay your attorney instead of your other creditors.
Contact Detroit Bankruptcy Lawyer Andrew Steiger
If you live in Michigan and are considering bankruptcy, contact Michigan bankruptcy attorney Andrew Steiger for a free consultation to discuss your options to reduce your debts and protect your assets. Attorney Steiger is available to help debtors across Metro Detroit and the Eastern District of Michigan file bankruptcy. Detroit bankruptcy attorney Steiger will provide you with a free consultation to discuss your current financial situation and possible outcomes of a bankruptcy filing. If you are concerned about Covid exposure, the work can be performed remotely to ensure your safety. Steiger Tax Law is a debt relief agency helping people file bankruptcy under the United States Bankruptcy Code. For more information, call 248-259-6367 or email Attorney Steiger at Andrew.firstname.lastname@example.org.
Contact Detroit Bankruptcy Lawyer Andrew Steiger for free consultation for a Chapter 7 or Chapter 13 bankruptcy. Free consultation does not establish attorney-client relationship. Information is confidential and protected by attorney-client privilege.