For many debtors in Michigan, it may be challenging to handle creditors' harassing phone calls and the possibility of losing their home or car. Some debtors may find that filing for Chapter 7 or Chapter 13 bankruptcy provides a sound solution. However, it is not the right solution for everyone, and it may be helpful to consult an experienced Grand Rapids or Traverse City bankruptcy attorney about your particular situation. The paperwork for bankruptcy must be completed carefully so that you can make sure to obtain the greatest possible discharge. At the Neumann Law Group, we can assist you with this process. Our firm also can advise creditors who need guidance from a collections attorney in Michigan.Bankruptcy
When you file for either Chapter 7 or Chapter 13 bankruptcy, an automatic stay will be effected. This means that creditors may no longer try to collect on debts or proceed with lawsuits against you. For some debtors, the automatic discharge allows them to get their finances together, and it offers a respite from harassing phone calls and other stress.
The goal of both Chapter 7 and Chapter 13 bankruptcy is to obtain a discharge of dischargeable debts. Some examples of dischargeable debts include utility bills, personal loans, medical bills, and credit card debts. If you get a discharge, you no longer have liability for certain debts, and creditors may no longer pursue you to obtain payments for them. However, specific debts are not dischargeable, including child support, criminal restitution, and certain tax debts. Our bankruptcy lawyers can explain to Traverse City and Grand Rapids residents which debts may be dischargeable in their case.
In Chapter 7 bankruptcy, you are permitted to hold onto certain exempt property, but your nonexempt property will be taken by the bankruptcy trustee to be sold so that your unsecured creditors are repaid to the extent possible. You may use either Michigan exemptions or federal exemptions to protect specific assets. When a married couple files jointly, they may double some exemption amounts but are limited to taking one exemption on certain property, such as their home. Chapter 7 bankruptcy takes only a few months to complete.
Chapter 13 bankruptcy requires you to create and get approval for a debt repayment plan that will result in most of your debts being repaid over a period of three to five years. Only after you successfully complete your plan will you receive a discharge of your dischargeable debts. Filing for Chapter 13 allows you to use many different tools, including tools to stop your home from being foreclosed upon, to get up to date on missed mortgage or car payments, to strip fully unsecured junior mortgage liens, and to keep certain assets.
Whether you should file for Chapter 7 or Chapter 13 may depend on the outcome of a means test. You must pass the means test in order to file for Chapter 7 bankruptcy. The purpose of the means test is to restrict the use of Chapter 7 bankruptcy to people who genuinely cannot pay their debts. Certain necessary monthly expenses are subtracted from your average monthly income to determine your monthly disposable income. The higher your disposable income, the more likely it is that you will need to file for Chapter 13 bankruptcy.Discuss Your Situation With a Bankruptcy Attorney in Grand Rapids or Traverse City
If you are thinking about filing for bankruptcy, our firm may be able to assist you. It is crucial to complete the paperwork carefully so that you list all of your dischargeable debts, and it is important to understand which exemption laws you should elect. Our Traverse City and Grand Rapids bankruptcy lawyers represent people in Detroit, Lansing, Ann Arbor, Flint, Petoskey, Warrent, Holland, Muskegon, Midland, Kalamazoo, Wyoming, and Saginaw, as well as areas throughout the Upper Peninsula. Contact the Neumann Law Group at 800-525-NEUMANN or via our online form to set up a free appointment. We also are available if you need an injury lawyer or assistance with many other types of legal matters.