If you are thinking about filing for bankruptcy in Michigan, you need to know a few things. Bankruptcy is a process that has certain requirements. It can also determine different situations in people’s lives.
Each person’s financial situation is unique, and the specifics might vary significantly. Discharging or reorganizing your debts can provide relief, but it’s important to understand what this process entails.
Your bankruptcy attorney should be able to provide you with an honest opinion of whether filing for bankruptcy is the best solution to your financial problems. A good law firm will never propose it if it isn’t appropriate for you.
In the United States, who is in command of bankruptcy laws?
The US Constitution gives the US Congress the power to make laws about bankruptcy for the whole country.
Legislators have passed several laws about bankruptcy. The most recent law is The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). This law governs how bankruptcy works in our country. Additionally, each state has the right to make its laws as it relates to the state-allowed exemptions you are entitled to in bankruptcy.
And across the country?
There are 90 districts for bankruptcies across the country. The bankruptcy courts have their own offices which clerks run.
The United States bankruptcy judge is the court official with decision-making authority in federal cases, which are heard in the United States Bankruptcy court.
Five questions for your initial consultation with a bankruptcy lawyer
First of all, remember that most law firms offer a free consultation before you hire them for a bankruptcy case.
A free consultation helps you decide before hiring a bankruptcy lawyer because you can ask some important questions that can make all the difference for your entire process before showing up at the bankruptcy court.
Question #1 Do you recommend filing bankruptcy in my case?
While the circumstances may appear comparable, each person’s circumstance is unique. Any bankruptcy lawyer must be able, according to his or her experience, to give you an honest assessment as to whether you should file for personal bankruptcy. This assessment can be very accurate so long as you, the client, are providing accurate information regarding your entire financial/asset situation.
Question #2 How do I prevent my bankruptcy case from being dismissed?
Bankruptcy cases can be dismissed for a variety of causes, including fraudulent conduct (such as embezzlement) and the failure to submit the necessary documentation to the court.
When you submit your papers, you must tell the truth and provide complete financial information. This includes any investment or real estate holdings, as well as other income sources and assets.
If you make a fraudulent statement on your paperwork or otherwise try to defraud the system, the court will most likely reject your application and issue a denial of discharge. You may also be prosecuted by the department of justice for committing a crime.
In most cases, to qualify for bankruptcy, your disposable income must be lower than the state average based on your family size. This is called the means test. The test compares your yearly income for the six months beforehand against that of a typical family in the state.
All debtors are required to complete a credit counseling course before bringing a claim and a debt management course before obtaining a discharge, according to the law.
When you complete each course, you’ll get a certificate of completion to submit to the court. If neither certificate is submitted, your case will be dismissed or you may not receive your discharge in bankruptcy.
Question #3 Which type of bankruptcy is the best for my case?
A bankruptcy lawyer can’t respond to this without first considering your property and debt types. You’ll also need to explain how much money you make.
Chapter 7 bankruptcy
Chapter 7 bankruptcy can help people who do not have a lot of money and who can protect their property with bankruptcy exemptions after considering the non-exempt assets.
One of the benefits of Chapter 7 is that it is over in about four months. However, any property that is not covered by a bankruptcy exemption will be sold to pay off your creditors according to the bankruptcy code.
Chapter 13 bankruptcy
Individuals with a steady income who can pay creditors over a three- to five-year repayment plan are eligible for Chapter 13.
It’s a fantastic tool for debt relief and reorganizing, as it can help individuals catch up on their mortgage and vehicle payments. You may keep all of your property in Chapter 13 as long as you can repay creditors the amount of money owed on the exempt property through the plan.
According to the bankruptcy code, the average duration of a Chapter 7 bankruptcy is three months, whereas Chapter 13 bankruptcy usually lasts three to five years because it is a debt repayment program.
The main objective of the means test is to force higher-earning debtors to repay part or all of their debt through Chapter 13 rather than allowing them to do so through Chapter 7.
All property that a Chapter 7 filer can’t protect with an available exemption may have that property sold by the Chapter 7 Trustee to use those sale funds to repay the bankruptcy creditors you listed in your case. . Most filers who have a choice choose Chapter 7 unless they own an important non-exempt property they want to keep.
Question #4 What is the real cost of bankruptcy (and are there additional costs)?
If you are going through this process, the costs include:
- credit counseling course fees
- court filing fees
- bankruptcy attorney fees (unless you file on your own)
Filing fees are the same throughout the country, but attorney charges vary depending on where you live, the complexity of your case, and the attorney.
Unless your attorney’s fees fall below the so-called “no-look” level that is recognized as reasonable, your court will evaluate them in Chapter 13 bankruptcy. The level of legal fees varies from one district to another, so check with your local court before hiring an attorney.
You should feel confident that one attorney is never your only option. Do not be afraid of paying higher fees to your lawyer when filing for bankruptcy if that will give you peace of mind.
Question #5 Will I be able to eliminate all of my debts?
A bankruptcy attorney will be able to tell you if you can discharge or get rid of credit card obligations, medical and utility bills, personal loans, back rent, and other debts.
In other situations, debt relief may include getting rid of your mortgage and automobile payment, but you must return the property to the creditors if you don’t fulfill your obligations as agreed.
Although you may not be able to eliminate other debts, such as child support obligations or educational loans in most cases, and tax debt incurred recently, you might still be able to negotiate a settlement.
Expect your lawyer to inquire if you have any non-dischargeable obligations. You can get a head start by checking out this list of debts that you cannot discharge.
Finding an experienced bankruptcy lawyer
If you are thinking about going through a bankruptcy process, though you can do it on your own, it is advisable to look for a law firm that is practicing bankruptcy law.
Screening prospective bankruptcy lawyers is the first stage in choosing one. You need to interview a few bankruptcy attorneys to find the right one for you. Make sure you find someone who you feel comfortable with and who understands what you’re going through.
Alternative options to finding a bankruptcy attorney
Most law firms also have their contact at your local bar associations, but it is not the only one.
Websites that can assist you in locating bankruptcy lawyers abound on the internet, but traditional approaches are still beneficial. Inquire with neighbors, as well as friends and relatives.
Some websites that can help you find a good attorney to file for bankruptcy are:
How long does it take to file bankruptcy in Michigan?
The time it takes to complete a case is usually 4-5 months, but, once the case is filed, the court’s protection is immediate. This implies that creditors will not contact you again, send you letters, seek money from you through collections, or file legal actions such as wage garnishment.
What are the consequences of filing bankruptcy?
Bankruptcy may have a negative influence on your immediate monetary situation. After bankruptcy, obtaining credit might result in higher interest rates. Obtaining credit after filing for bankruptcy may necessitate security deposits.
Should I close my bank account before declaring bankruptcy?
It depends on the type of account held, (i.e., through a credit union or a traditional bank) and whether you still owe money to the banking institution. You’ll need to open checking and savings accounts with a bank that doesn’t deal with any of your debts to file bankruptcy. You don’t have to terminate other accounts. leave them open and report them or have your lawyer do it.