Frequently Asked Questions About Bankruptcy in Michigan
Answers from an experienced Flint bankruptcy lawyer
At the Bankruptcy Law Office of George E. Jacobs & Associates, we know you may need guidance about the process of seeking debt relief through bankruptcy. With more than 30 years of experience, we’re here to help you understand the essentials of bankruptcy by answering such questions as these:
- What can bankruptcy do for me?
- What is a Chapter 7 bankruptcy?
- What is a Chapter 13 bankruptcy?
- What will happen to my home and car if I file bankruptcy?
- Will bankruptcy wipe out all my debts?
- Can filing bankruptcy stop bill collectors from calling?
- Can I get a credit card after bankruptcy?
Contact our Flint office for a free bankruptcy consultation
At the Bankruptcy Law Office of George E. Jacobs & Associates in Flint, Michigan, we can review your financial situation and give you detailed advice on how to use the bankruptcy system to your best advantage. Call our office at 810-275-0608 or contact us online to set up a free initial consultation. We look forward to working with you.
Bankruptcy can stop debt collections, repossessions, foreclosures and services interruptions. It can provide you with a fresh start by discharging certain debts and allowing you to catch up on missed payments and overdue bills within a reasonable time frame. The bankruptcy process can even help you improve your credit once debts have been discharged or paid down. The process can give debtors the reboot they need to focus on moving forward and improving their financial standing.
A Chapter 7 bankruptcy is called a liquidation because it calls for sale of a debtor’s assets to pay off creditors, except for assets found to be exempt. A Chapter 7 discharge means you are not required to pay back most of your debts. For debtors with modest incomes and few nonexempt assets, Chapter 7 can be the most effective way to get a fresh financial start. However, it may be not right for debtors who own a lot of nonexempt, valuable property they wish to retain.
A Chapter 13 bankruptcy is known as reorganization because it creates a plan by which wage earners can partially pay back their creditors over time. Chapter 13 can be a good option to avoid foreclosure, forfeiture or repossession of property if your income level and the value of your assets are too high to qualify for Chapter 7. A Chapter 13 plan can give debtors much-needed time to spread out payments and catch up on debts that are not dischargeable, such as child support and back income taxes.
Chapter 13 allows you to save your home from foreclosure and a car from repossession if the court approves your reorganization plan. In Chapter 7, debtors’ homes and vehicles may be considered exempt or partially exempt under state laws. Michigan allows for a homestead exemption allows each homeowner to exempt $38,225 of equity in their home, and to take an additional exemption of the same amount for each dependent. Seniors over age 65 are allotted a greater exemption of $57,350. Michigan also allows for a modest vehicle exemption of $3,475.
A large portion of Chapter 7 debtors are able to discharge most or all of their debts, including credit card balances, medical bills, past-due rent and business debts. However, certain types of debts cannot be discharged, such as alimony, child support, student loans (except in cases of extreme hardship), fines and penalties due to courts or government agencies and back income taxes assessed within the 240 days prior to filing the bankruptcy petition. Older tax debts may be discharged, but if the IRS placed a lien on any of your property to collect the back taxes, that lien must still be paid off.
Yes. The federal Fair Debt Collection Practices Act prohibits creditors from contacting a debtor once they have been notified of that a bankruptcy is in progress and have been provided with a filing number. Furthermore, the law prohibits creditors from harassing or threatening debtors or using other xxx practices, whether or not they have not filed bankruptcy.
Typically, yes. Debtors who file bankruptcy may be granted unsecured lines of credit. In fact, some credit cards are specifically targeted at those with prior bankruptcies. Some of these offers can be exploitative though, carrying high interest rates and fees or oppressive payment terms. Obtaining a secured credit card or loan, or starting off with a credit card with a lower balance limit, are ways to begin to rebuild your credit after bankruptcy.