Bankruptcy Attorney in Michigan  

Walter A. Metzen, Michigan Bankruptcy Attorney

Board Certified Consumer Bankruptcy Specialist

American Board of Bankruptcy Certification

 


    
 

Frequently Asked Questions about Bankruptcy

What is bankruptcy?

Bankruptcy is the legal method for a debtor to discharge or relieve debt. Bankruptcy is a way for people or businesses who owe more money than they can pay to either work out a plan to repay the money over time or to have their debt wiped out. While no debtor is guaranteed a total discharge, most debtors who file for bankruptcy are given such relief. One of the primary purposes of the bankruptcy act is to relieve the honest debtor from the weight of oppressive indebtedness and to provide the debtor with a fresh start. Throughout the whole bankruptcy process creditors must stop their collection efforts. The Bankruptcy Code is categorized by several chapters with Chapter 7, Chapter 13 and Chapter 11 being the most common. Debtors have different responsibilities for dealing with creditors under each of these chapters.

Do I qualify to file bankruptcy?

You do not have to qualify to file bankruptcy. Any person, partnership, corporation or business trust may file bankruptcy as long as you are willing to follow what the law requires. United States citizenship is not a requirement. Loss of job, medical difficulties, or divorce are among the most common reasons people consider a bankruptcy; however, they are not legal prerequisites. A common scenario is that many working people find it difficult or impossible to pay high credit card interest and fees. Bankruptcy offers an alternative to the chronic harassment of creditors who are unwilling to work within your financial limitations. Since credit cards make it very difficult to regain your financial stability once you get behind in payments, a bankruptcy makes sense if you see this situation becoming chronic without an end in sight.

What is Chapter 7?

This is often called a "straight" bankruptcy. Debtors usually receive their discharge soon after they file and they are allowed to keep any money they earn after they file. In Chapter 7, debtors are required to give up "non-exempt" property and laws in Michigan have different requirements. Some debts will be dischargeable while others will not. Determining exempt property (or property you are allowed to keep) and knowing how to handle the issues of dischargeable and non-dischargeable debts are the most important reasons to be fully prepared before you file, and since Attorney Walter Metzen is Board Certified in Consumer Bankruptcy Law, he is highly experienced and will be able to address these issues for you.

What is Chapter 13?

Chapter 13 is the "wage earner" chapter. Debtors who have a regular source of income repay some or all of their debts over a three-to-five year period during which they are free from harassment from their creditors. The most common reason people file a Chapter 13 is that debtors have a pending foreclosure because the Bank refuses to work out a reasonable repayment plan. A Chapter 13 filing forces the bank to accept back-due mortgage payments over 3 to 5 years. At the end of the repayment period, debtors are issued a discharge order. While Chapter 13 is a far more involved process than a Chapter 7, it will discharge debts that Chapter 7 will not, and sometimes it is the only way for people to protect their home or other assets from their creditors.

Will my spouse be responsible for my debts if I file bankruptcy?

Not unless he/she is personally liable on any of the debt you hope to discharge in a bankruptcy. It is important to make sure that there are no courtesy credit cards issued to your spouse that make them liable. If you have a joint credit card or car loan with a spouse that is listed in a bankruptcy, this will not affect your spouse's credit as long as the payment continues to be paid when due.

Will I lose everything I own if I file bankruptcy?

It is a popular misconception that bankruptcy necessarily leads to the loss of all property. People frequently keep their homes, cars and other assets in bankruptcy cases as long as they continue to repay their loans. Each state has a limit on allowable property values and you want to make sure your property is within these guidelines. You will be best served by a qualified bankruptcy specialist who understands what those limits are and who can advise you accordingly.

What affect will bankruptcy have on my credit?

Chapter 7 bankruptcy will stay on your credit report for ten years and Chapter 13 will be there for seven years. If you are currently contemplating bankruptcy, it is likely that your current credit rating has already been affected. Being legally liable for debt which you cannot repay significantly lowers your credit score. Ironically, a bankruptcy may help restore your credit faster rather than letting chronic debt continue. It is quite common for people to be offered credit cards shortly after completion of a bankruptcy and for people to purchase homes within several years of completing a bankruptcy. Lenders will tell you that it is easier to secure a major loan after a bankruptcy if there are steady, regular payments on your accounts. If you want to obtain a mortgage within two years of discharge, the size of your down payment and the stability of your income will be more important than the fact that you filed bankruptcy. Once your bankruptcy has been discharged, your creditors have to report to credit agencies that your accounts now need to read as zero balances and Attorney Walter Metzen can show you how to make sure this is done.

Do I have to go to court?

Every debtor, no matter what chapter is filed, must attend a meeting of creditors. In almost all Chapter 7s, this is the only hearing that is required. A trustee is appointed by the United Trustee's Office to oversee each case. A judge does not attend the creditors' meeting. This hearing (known as the 341 meeting from the federal code that it refers to) allows the trustee to look at your bankruptcy papers while asking you various questions about them. Attorney  Walter Metzen will prepare you for these hearings and will attend them with you. 341 hearings are usually fairly short.

Is it possible to choose which debts I can get rid of in a bankruptcy?

Reaffirmation agreements are normally used to allow debtors to keep things such as a home and cars by continuing to make timely payments to their creditors. This debt will no longer be dischargeable and the agreement cannot put an undue burden on debtors or their dependents. These agreements should be carefully and fully considered before entering into them.

We are sure you have other questions that are specific to your case. Whether you are an individual or small business owner, Attorney Walter Metzen looks forward to speaking with you. Your first office visit will be completely free of any charge.

The information contained here is for educational purposes only and it is not intended as legal advice nor does it constitute the establishment of an attorney-client relationship. You should consult a bankruptcy attorney for specific advice about your situation.

The purpose of a chapter 7 is to grant debt relief and allow a person to obtain a fresh start, free from creditors and free from the pressures of over-whelming debt. Under chapter 7, a trustee takes possession of non-exempt property assets, converts them to cash and distributes the funds to creditors. After filing for relief, an individual debtor may receive a discharge of debts.

A discharge permanently prohibits most creditors from attempting to collect those debts listed by the debtor on the bankruptcy schedules. However, some debts are non-dischargeable. They include certain taxes, student loans, alimony, and child support to name just a few.

 

A corporate business that files chapter 7 is not eligible to receive a discharge.

  •   Driver's License or State ID & Social Security card
  •   Pay Stubs for the past 2 months
  •   Copies of all Bills, Summons or Judgments against you by creditors
  •    Divorce Judgments or Decrees
  •   Real Estate Documents, Deeds, Recorded Mortgages, mortgage balance statements
  •   Property Tax Bills (SEV)
  •   Bank Statements for 3 months
  •   Recorded Mortgage and Deed
  •   Car Titles
  •   Income Tax Returns & W2 forms
    for the last 2 years