Bankruptcy isn’t most people’s first thought when they encounter financial troubles. In fact, most people who eventually file bankruptcy struggle for a few years before taking action. That’s two, three, or even five years of unnecessary stress, wasted money on late fees and interest, and being stuck in the same place financially.
If you’re caught in a cycle of past-due payments, mounting late fees and interest, and non-stop financial stress, you owe it to yourself to learn more about bankruptcy and how it might help you reclaim control of your finances.
At Reinert & Reinert, our entire legal practice is dedicated to helping people in and around Saginaw resolve debt. We offer free consultations to make sure you have the information you need to make the right decision for you and your family. To learn more, call 989-799-8860 or click at the bottom of your screen to chat.
How Can Bankruptcy Help?
Some problems bankruptcy may be able to solve include:
- Overwhelming credit card debt
- Wage garnishments
- Creditor harassment
- Automobile repossession
- Debt from a failed business endeavor
Of course, every case is different. The best way to find out what bankruptcy could do for you and which type of bankruptcy is the best fit is to talk to an experienced Saginaw bankruptcy lawyer.
Finding the Best Debt Resolution Option for You
Attorney Josh Reinert has helped thousands of Michigan residents get out of debt and move toward a more stable financial future. He has the knowledge and experience to help you find the right solution for your situation, and to make the process as efficient and stress-free as possible.
Here’s a brief overview of how each type of consumer bankruptcy works:
Chapter 7 Bankruptcy
Chapter 7 is by far the most common type of bankruptcy, and the one most people are familiar with. In a Chapter 7 case, a qualified bankruptcy filer may discharge (get rid of) a wide range of unsecured debts, including credit card debt, payday loans, medical bills, old utility bills, deficiency judgments on repossessed automobiles, and unsecured personal loans.
There are a few types of unsecured debt that are not dischargeable in bankruptcy. These include child support, some tax debt, and debts relating to injury or death caused maliciously or while driving under the influence.
Chapter 7 is the quickest, simplest, and least expensive form of consumer bankruptcy, and allows for the most significant shedding of debt. But, it’s not the right answer for everyone. A Chapter 7 filer must qualify based on income. Even for those who qualify, there may be other reasons not to file Chapter 7. One example would be that the prospective bankruptcy filer had a lot of property that wasn’t protected by bankruptcy exemptions. In that case, the filer would stand to lose property in Chapter 7. Another is that a person considering bankruptcy had secured debts they wanted to manage, such as a past-due mortgage.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy requires a three to five year repayment plan. This type of bankruptcy is typically chosen by people who aren’t eligible for Chapter 7 bankruptcy, who have a lot of non-exempt property they want to keep, or who want to use bankruptcy to catch up on past-due secured debts like a home mortgage.
The bankruptcy filer and their attorney put together a repayment plan based on their debts and income. They must have sufficient income to pay the plan payments toward their past-due balances and their current living expenses. Depending on the filer’s income and the amount of debt they are including in the plan, some unsecured debt may be discharged at the end of the repayment plan.
How Do You File for Bankruptcy in Michigan?
The first step is to consult a Michigan bankruptcy attorney. Once you’ve determined which type of bankruptcy is best for you, your attorney will complete a bankruptcy petition and schedules for you. The schedules include detailed information about your income, assets and debts. You’ll also have to complete a credit counseling course session before you file, and file your certificate with the petition. This session is inexpensive and can usually be completed online or by phone.
In 2023, the filing fee is $338 for Chapter 7 and $313 for Chapter 13.
The Chapter 7 and Chapter 13 process differ from there on out, and your bankruptcy attorney will explain in greater detail what you can expect. Those filing both types of bankruptcy must attend a meeting of creditors, also known as a 341 hearing. This meeting is typically brief and in most cases creditors do not appear to ask questions. At some point after filing, the filer must also complete a debtor education course.
In a Chapter 7 case, if there are no objections or adversary proceedings filed, that’s usually the last step for the debtor. After that, it’s a matter of waiting to receive the discharge order, which usually arrives 4-6 months after filing.
In Chapter 13, the court must approve the plan. The filer makes regular plan payments to the bankruptcy trustee for distribution to creditors, and keeps their current payments up to date. At some point after filing, the filer must complete a debtor education course. If the plan is completed successfully, any remaining dischargeable unsecured debt will be discharged and the case closed.
Bankruptcy Can Be a Fresh Financial Start
For many people, bankruptcy can be a positive step forward–a way of taking charge of out-of-control finances and building a more solid foundation for themselves and their families. To find out whether bankruptcy may be the answer for you, call 989-799-8860 right now.