BANKRUPTCY

Are you struggling to pay your debts or suffering from financial harship?  Are creditors threatening to repossess your car, garnish your wages or seize your bank accounts?  Is your business at risk of closing?  If you answered yes to any of these questions, bankruptcy may be a good solution and provide necessary relief from the stress of creditor actions.  Read on to learn more about filing for bankruptcy and what you need to know.

 

How can bankruptcy help you?

 

Successfully completing bankruptcy can discharge some or all of your debts.  You may also be able to keep some or all of your assets depending on your personal circumstances and the type of bankruptcy chapter you file under, either Chapter 7 or Chapter 13.  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.  

 

What is Chapter 7 bankruptcy?

 

A Chapter 7 bankruptcy is a liquidation filing that is available to individuals and companies.  The goal is to eliminate all dischargeable debts and pay creditors to the extent there are assets of the estate to pay secured creditors, creditors with priority claims, and then unsecured creditors. 

 

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 Chapter 13, an individual debtor in Chapter 7 will have to sell or give up certain property owned, but will get a fresh start after the bankruptcy is approved. 

 

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 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 a Chapter 13 filing 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?  

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 their 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 period.  Chapter 7 is does not require a plan, but may not protect a home or car from foreclosure.  Depending on the client's goals and personal situtation, a careful analysis is required to determine eligibility and which bankruptcy chapter to file under.

I'm retired and on a fixed income - can I benefit?

Yes. Bankruptcy provides exemptions for certain retirement account types 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.  Future income may not be subject to creditor demands, so you can live without fear that creditors will take your retirement.

 

Contact Michigan Bankruptcy Attorney Andrew Steiger

 

If you 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 will provide you with a free consultation to discuss your current financial situation and possible outcomes of a bankruptcy filing.  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.steiger@steigertaxlaw.com.

Free Consultation

Contact Michigan Tax Attorney Andrew Steiger for free consultation to determine if he can help solve your tax or other legal problem.  Free consultation does not establish attorney-client relationship.  Information is confidential and protected by attorney-client privilege.

Free Consultation

Contact Michigan Attorney Andrew Steiger for free consultation to determine if he can help you file for bankruptcy.  Free consultation does not establish attorney-client relationship.  Information is confidential and protected by attorney-client privilege.

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