Assuming you’re making plans for personal bankruptcy, you’ve already likely got much to consider. The good thing about bankruptcy is that it gives you a fresh start, and compared to other options, is a really good way of getting one’s money situation under control again. Yet, your bankruptcy petition can eat up a lot of your energy and time. Whether it ’s organizing every one of your written documents, making certain they find themselves in the right hands by certain dates, or coming to the required credit counseling session, you might end up doing a decent amount of running around.
After your counseling session and once you have your personal financial documents ready to go, it isn’t always obvious where to start. Several application sheets and forms are required, all of which are accessible and can be ordered online. You will also want to come with your filing fee available; for Chapter 7, this is $299, and then for Chapter 13, $274. These figures each cover the added administrative fee and are susceptible to change. Based upon your monetary constraints, this might be settled in installments, but make sure you double-check before planning on that to be the case. While it is possible to submit the necessary forms all on your own, it’s helpful to enlist the support of a qualified bankruptcy attorney. Nothing else can happen in your bankruptcy before every required document is filed correctly, and thus it’s crucial to ensure that it’s all in order.
Depending on where you reside, your Chapter 7 or 13 petition can be submitted at one of several courtroom and clerks’ offices. Chapter 7 will require an inventory of valuable assets, and for Chapter 13 you’ll need a payment schedule already planned out. When filing, the usual necessities apply: you should definitely have your valid state ID and Social Security number.
The region in which you file is required to be where you have resided or conducted business for at least 6 months (180 days). If you reside in the Western District, one can find court buildings in Grand Rapids (One Division Avenue, N.); Marquette (202 West Washington St., 3rd floor); Kalamazoo (410 West Michigan); Lansing (315 West Allegan) and Traverse City (Logan Place West, 3249 Racquet Club Drive). Federal government buildings and local trustee’s offices, in which your 341 (or creditor’s) meeting would be held, also are situated nearby in those regions. The office is open between 8:30 AM and 4:00 PM each day, besides the weekends and legal holidays.
If you need to file in the Eastern District, bankruptcy courts can be found in Flint (226 West Second Street), Detroit (211 West Fort Street) and Bay City (111 First Street). 341 meetings for residents from the regions occur in the same office buildings, except for in Bay City where the 341 site is right down the block from the main court building. The clerk’s office is open Mon – Fri., 8:00am to 4:00pm, again excluding Saturdays, Sundays and our annual holidays.
Bankruptcy could be the ideal opportunity to rearrange your credit and money affairs, and could help you correct the habits that could have added to financial problems in the past. Although the information and mass of the paperwork could seem daunting to you, a bankruptcy lawyer will easily comprehend them, and could be a vital resource when it comes to coordinating and processing your bankruptcy. Structure your bankruptcy thoroughly prior to when you file – as long as it’s submitted and carried out competently, it’s your first big step in the right direction of a better financial future.
If you’re thinking about filing for personal bankruptcy, it’s important to know ahead of time what you’ll need to file properly. In 2005, many modifications were made to U.S. bankruptcy guidelines, and some of these may have an effect on how and which Chapter you choose to file. Just one of the biggest differences concentrates on pre-filing obligations, which now call for finishing a credit guidance program.
At some point in the 180 days (six months) leading up to filing, a debtor has to locate a government-approved company offering the right credit counseling program. This needs to be an agency located in your judicial district, the same area in which you will file for bankruptcy. The counseling session typically costs around fifty dollars, depending on the services offered; for people who cannot afford it, one could request a free counseling session from the institution before the counseling session takes place.
Even though this requirement may sound overwhelming, it generally lasts within an hour and a half, and might be accomplished via phone, on the web or at the credit counseling office. The whole course usually consists of a detailed look at your present economic condition, and a discussion about whether or not personal bankruptcy is the best choice for you at this time. It also helps to think of the counseling as a resource, instead of a chore. A reasonable budget can be devised at this time with the help of the credit counselor. This may be convenient later on as the initial outline of your monthly payment program, and help you to stay on track.
What, exactly, will you need to be ready for the counseling course? You might want to have pay stubs, a record or estimate of regular bills and valuable assets, and a recent and comprehensive outline of all (both secured and unsecured) debts owed. Having these documents prepared prior to the appointment will be a big help. You’ll also want to take time when selecting a counseling agency, as they can range in skills, certification status and accessible programs and services.
Once you’ve participated in the course, you need to receive a certificate of completion. This is going to be filed along with your petition; without the inclusion of the certificate, which is provided by the U.S. Trustee, your case will be dismissed. Check with the Trustee’s office or your area bankruptcy clerk’s office to locate an accredited, trustworthy, and supportive consumer credit counseling organization.
If you’re considering filing for a Michigan bankruptcy, you’ll likely want to do some research regarding the different types of bankruptcy and how they work. The choice you make will affect your future and that of your loved ones, so it’s important to have all the facts before you proceed. However, the ‘facts’ you know about bankruptcy might be wrong, as myths regarding the process have been around for almost as long as bankruptcy itself. Here are a few of the most commonly-accepted myths, and the realities behind them.
Since I’m married, my spouse has to file, as well.
This depends on what kind of debt you have. If you’ve got overdue credit card payments in your name only, there’s no need for your spouse to file, though certain debts may still be exempt from the automatic stay that prevents debt collectors from looking to them for the payments. In the event of joint ownership on a house or car that you cannot pay off, your spouse will likely be held accountable. Because everyone’s particular case and needs are different, it could benefit you to consult a lawyer for advice.
If I file bankruptcy, my credit will be ruined!
This is almost as far from the truth as possible. As your debts are a huge problem, bankruptcy is a solution, and may actually improve your chances of obtaining credit in the future, though it may come at a higher interest rate. While the bankruptcy will appear on your credit report for ten years, credit can be available almost immediately, sometimes even during the proceeding. This can be a great opportunity to reestablish your credit, little by little, by making sensible financial choices and taking care to pay off your bills before they have the chance to build up.
Because my income is more than the amount specified by the Means Test, I can’t file for bankruptcy.
The Means Test is designed to find out whether someone needs to file for bankruptcy, based on family size and current income. Depending on your personal finances and future needs, however, scoring above the means test formula (which is a comparison of your household income to the state median) doesn’t necessarily disqualify you, although it may imply a change from one Chapter of bankruptcy to another.
My boss and friends will know I filed for bankruptcy.
Unless you personally inform them of your situation, there’s very little chance that they will find out. In most cases, the only people aware of your bankruptcy are you, your lawyer and any creditors involved.
Filing for bankruptcy will drain my 401k.
In most cases, you’ll be able to retain your retirement funds. Most pensions and 401ks are protected by ERISA, the Employee Retirement Income Security Act, and are therefore separate from the rest of one’s assets. Some people consider taking money out of their 401k to pay off their bills, which could in the end do more harm than simply filing bankruptcy.
Since I intend to pay off some of my debts, I don’t have to list those creditors in the schedule.
It doesn’t exactly work that way, and believe it or not, listing all your creditors can be better for you, as the automatic stay will apply to them. Instead of keeping only half your creditors from bothering you, why not keep them all at bay? Even if you intend to pay off a certain debt on your own, it must still be included in the bankruptcy, with valid contact information for the debt collectors so that they can be informed of the proceeding.
Bankruptcy will get rid of all my debt!
While bankruptcy exists to give you a fresh start, it’s good to keep in mind that not all debts are dischargeable, and you should be prepared to include payments for certain things in your court-approved payment schedule. Just a few of the non-dischargeables you may run into are spouse or child support, back taxes, student loans, or any penalties due to criminal activity.
These are just some of the myths we hear most frequently from concerned debtors. If you’re in need of assistance regarding the details of your potential bankruptcy, Ardelean & Dunne, PLLC has the knowledge and experience to see you through the process and on your way to financial freedom.
If you owe a credit card company money and do not pay it, they often turn your debt over to a debt collector. These debt collectors can be ruthless and aggressive, causing pain and embarrassment to you as you struggle with your finances. At some points, a debt collector may be breaking the law, and that is the time to contact a Detroit debt law firm.
In the late 1970s, the United States passed a groundbreaking law to protect consumers from the abusive practices of the debt collection agencies. This law was called the Fair Debt Collection Practices Act, and there are very specific rules that debt collectors need to follow:
• They may never use a false name.
• They cannot contact you via postcard.
• They cannot mislead you to thinking they are a credit bureau, an attorney, a government representative, or to pretend that you are breaking the law.
• An agent may not call you before 8:00am or after 9:00pm.
• They may not contact you at work.
• They are barred from using obscene language.
• They cannot threaten you with an arrest if you do not pay the debt.
• They may not send you any documents made to look as though they are government documents.
If you tell a debt collector to stop contacting you, they are legally obligated to cease the harassing calls. If you can prove that the debt collection agency you are dealing with is breaking this law, you should contact a Detroit debt law firm immediately. At this point, if the collector knows you have retained an attorney, they will need to contact the attorney and not you. Proof will be needed, so you may wish to record your call with the debt collector. The firm can present your case in court, and your debt may even be forgiven if the collector is convicted of breaking this law.
What Exactly Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, often known as a straight bankruptcy, is a liquidation proceeding. The debtor hands over all non-exempt assets to the bankruptcy trustee who then converts it to cash for distribution to the collectors. The consumer will get a discharge of all dischargeable financial obligations generally within four months. In the majority of cases the consumer has no assets that he would lose so Chapter 7 will provide that him / her a relatively quick “fresh start”.
One of the most important functions of Bankruptcy Law is to allow an individual, who is hopelessly mired with debt, a clean start by wiping out his / her debts.
Men and women who file for chapter 7 bankruptcy must agree to go to credit counseling. After declaring chapter 7 bankruptcy, it may be tough to obtain credit for a few years, and you will not be able to file for personal bankruptcy again for a set period of time.
It has become more challenging to file for chapter 7 bankruptcy in the United states, thanks to laws which substantially tightened the bankruptcy policies in the early 2000s. It is wise to consult a legal professional and an accountant prior to investing in a bankruptcy filing, because even though the professional fees for the assessment may be high, there may be an option that has not been thought about. A professional consultation can also smooth the way to move forward with bankruptcy filings, if a debtor decides to carry on with bankruptcy proceedings.
What Is Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy is commonly recognized as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who would like to pay off their financial obligations over a period of three to 5 years. This type of bankruptcy appeals to individuals who have non-exempt assets that they want to retain. It is also only an alternative for individuals who have predictable earnings and whose income is sufficient to pay their reasonable expenditures with some sum left over to pay down their financial obligations.
In a recent case, The US District Court Eastern District Of Michigan found that sovereign immunity was not waived as to proceedings against the IRS redirecting tax refunds to be paid to chapter 13 Trustees instead of to the debtors.
It was found that the bankruptcy court had no jurisdiction and authority to enter chapter 13 confirmation orders ordering the IRS to redirect tax refunds to be paid to chapter 13 Trustees instead of to the debtors.
The Court declared that the chapter 13 Trustees for the Eastern District of Michigan may not seek to enforce any provisions of chapter 13 plan confirmation orders entered by the United States Bankruptcy Court for the Eastern District of Michigan that compel the IRS to pay future tax refunds claimed by chapter 13 debtors to the chapter 13 Trustees instead of to the debtors.
You can read the Court’s full opinion here.
The Court has corrected an error in the copy of the Local Bankruptcy Rules posted on the web. Local Bankruptcy Rule 3001-2 on the website omits subsections (e)-(h).
Subsections (e)-(h) were added to Local Bankruptcy Rule 3001-2 on March 24, 2009 pursuant to Administrative Order 09-4. Subsections (e)-(h) of Local Bankruptcy Rule 3001-2 have continuously been in effect since March 24, 2009.
The copy of the Local Bankruptcy Rules on the Court’s website has been corrected.
Here is what the US Bankruptcy Court for the Eastern District of Michigan has to say about consulting with a bankruptcy lawyer:
“A bankruptcy case is a legal proceeding affecting the rights of both debtors and creditors. Title 28 U.S.C. Sec 955 PROHIBITS any member of the Clerk’s Office staff from giving any advice which may be considered legal in nature. Canon 2(f) and Canon 3 of the Judiciary’s Code of Conduct also PROHIBITS this office from providing legal advice and further instructs the staff to remain impartial.
Because bankruptcy is frequently complicated, it is strongly suggested that lay people obtain the services of an attorney.”
Talk with one of our experienced Michigan bankruptcy lawyers today.