24300 Southfield Road, Suite 210, Southfield, Michigan 48075
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24300 Southfield Road, Suite 210,
Southfield, Michigan 48075

Bankruptcy FAQ

If you’re considering bankruptcy in Detroit, Michigan, you are likely have a lot of questions. At the Bankruptcy Track law firm, we’re committed to getting you answers. Our Detroit bankruptcy lawyer has been helping people find a solution to their debt. Call 248-281-6299 for your free consultation. Below you will find general information regarding frequently asked questions about bankruptcy.

In general, most unsecured debts can be discharged (wiped away) in bankruptcy. These include credit card debt, unpaid medical bills, personal loans and the like.

Absolutely not. Bankruptcy law is designed so that you won’t lose property that you’ve chosen to exempt. Generally, that would be your home, household furnishings, vehicles that members of your family drive, retirement accounts, or tools of your trade. An exemption puts that property out of the reach of creditors and the bankruptcy trustee. You must still make payments on secured debts, like mortgages and vehicle loans, in order to retain your home or vehicle.

Absolutely not.Bankruptcy law is designed so that you won’t lose property that you’ve chosen to exempt. Generally, that would be your home, household furnishings, vehicles that members of your family drive, retirement accounts, or tools of your trade. An exemption puts that property out of the reach of creditors and the bankruptcy trustee. You must still make payments on secured debts, like mortgages and vehicle loans in order to retain your home or vehicle.

If you wish to keep property that is collateral for a loan – such as your home or vehicle – but are behind on your payments, a chapter 13 bankruptcy allows you to propose a three- to five-year payment plan to repay the debt and keep the property.

Yes, filing for bankruptcy stops almost all other collection actions. You can file for bankruptcy before a lawsuit is filed against you, while the lawsuit is pending, or after it has been resolved. It should be noted that filing for bankruptcy before a collection action has been finalized (meaning a judgment has been entered) is different than filing before that judgment has been entered, so it is important to discuss what impact a judgment may have on you with an attorney.

Yes. When you decide to get personal bankruptcy help, your attorney will notify each of your creditors that you intend to file for bankruptcy protection. At that time, they must stop contacting you about the debt.

No. You can file bankruptcy on your personal debts without including your spouse. However, any debts that have both of your names on them cannot be included in the bankruptcy action. It is in your best interest to try to work these issues out prior to filing so that you receive the most benefits from the bankruptcy.

While bankruptcy is a complicated area of law, the type of bankruptcy that works best for you largely depends on just two items: your income and your goals. Your income is important because it is used to determine if you pass the means test to qualify for Chapter 7. Your goals are important because even if you qualify for Chapter 7, your goals may dictate that Chapter 13 is a better fit. For instance, if much of your debt is secured debt and you are significantly behind in your payments, Chapter 7 may require you to surrender the collateral. However, Chapter 13 can permit you to catch up on payments through a payment plan and may allow you to cram down, or reduce, the principal on your loan to the property’s actual value.

There are two types of debt: secured and unsecured. Secured debt is when you use property – sometimes known as collateral – like your home to support a loan. An example is using your home equity to finance a car purchase. Unsecured debt is debt that is not secured by property. Some common examples of unsecured debts are credit card debt, medical bills, and lawsuit judgments.

Almost certainly. There are different kinds of bankruptcy for different situations. You may be eligible for more than one kind, so consulting with our attorneys will be a good first step:

Chapter 7

This is the most common kind of bankruptcy used by people in Michigan. It’s usually called a “liquidation” bankruptcy.

Chapter 12

This is used by farmers.

Chapter 11

This is usually used by businesses to reorganize their finances, though individuals can file Chapter 11 in limited circumstances.

Chapter 13

This is another kind of bankruptcy for individuals. You pay back more of your debt with this type of bankruptcy, but you also keep more of your assets.

Yes. About 30 to 40 days after the filing of your bankruptcy petition, you will have to attend a First Meeting of Creditors (it’s called a 341 meeting) presided over by your bankruptcy trustee. The trustee is not a judge, but a person appointed by the United States Trustee to oversee bankruptcy cases.

At the First Meeting of Creditors, the trustee will ask you questions (under oath) about your bankruptcy papers, your assets, debts and other matters. Creditors will also be permitted to ask you questions. However, usually creditors do not attend these meetings if you have filed for Chapter 7 bankruptcy.

The bankruptcy code imposes upon you to list all your creditors on your bankruptcy petition. Under some circumstances if the creditor agrees, you may be able to keep some credit cards. It is up to the credit card company to allow you to keep your credit card. There are many factors which must be considered. Some of the factors include the credit card balance at the time of the bankruptcy, what the credit card company is willing to do, and your ability to pay the present and future credit card debt.

If you’re struggling with out-of-control debt, you owe it to yourself to consider your options. There’s no substitute for meeting with an experienced bankruptcy lawyer. At Detroit Bankruptcy Law Firm you can find out whether bankruptcy is right for you by sitting down with one of our attorneys during a free consultation. Call 248-281-6299.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Filing for bankruptcy isn’t always easy. It can entail gathering a lot of paperwork and going to several meetings. The court needs to see a complete picture of your assets, debts, and spending.Before getting started, you need to collect all your financial documents so you understand the current state of your finances.

First, you need to obtain a copy of your credit report from Experian, TransUnion, or Equifax to learn how much debt you owe. You can obtain your credit report from all three for free once every year.

Some of your debts may not be listed on your credit report, like medical bills, personal loans, or tax debts. Make a list of any missing debts as you will need to list all of them on your bankruptcy forms.

In addition to your credit report, you will need the following documents:

  • Tax returns for the past 2 years
  • Pay stubs or other proof of your income for the last 6 months
  • Recent bank account statements
  • Recent retirement account or brokerage account statements
  • Valuations or appraisals of any real estate you own
  • Copies of vehicle registration
  • Any other documents relating to your assets, debts, or income.

This is a tricky issue. It is a crime to defraud creditors so you can fine yourself in serious problem. You can sell nonexempt property and pay off debt that would not be discharged in bankruptcy. Selling or transferring nonexempt property before bankruptcy can be a risky business. Although it’s allowed in some cases, if done incorrectly—especially if you’re trying to avoid paying creditors—you could face severe consequences. Contact our Detroit bankruptcy lawyer at www.BankruptcyTrack.com or call us (248) 281-6299.

If you file for chapter 7 bankruptcy, those people (co-signer) will be liable to pay the entire debt. You will be let off so they will have to pay. If you file for chapter 13, you will remain liable, and they will not be immediately liable for the debts.

Normally Not. People are asking our bankruptcy attorneys in Detroit many questions concerning Bankruptcy & Taxes such as can I file chapter 7 against IRS? can IRS debt be discharged in chapter 13? how will chapter 13 affect my taxes? What happens if you file for bankruptcy and owe taxes? Do you have to pay it back as part of your bankruptcy agreement? If you owe the government money, not all of your tax debt can be erased and more.

Bankruptcy does not provide solutions for all types of tax debt. Recent property taxes, trust fund taxes, sales taxes, certain employment taxes, and non-punitive tax penalties from less than three years before filing are non-dischargeable.

There are requirements for personal income taxes to be discharged in bankruptcy. The requirements are that your income tax return was due at least three years before you file your bankruptcy case, you filed the return at least two years before your bankruptcy case and the tax debt must have been assessed by the IRS at least 240 days prior to the bankruptcy filing. Also, for the taxes to be discharged in bankruptcy, the income tax return cannot be false or fraudulent. And the taxpayer cannot have willfully attempted to evade or defeat the tax. If all the required criteria are met to the satisfaction of the bankruptcy court, most tax debt can be discharged under Chapter 7. Failure to satisfy any one of the criteria makes tax debts non-dischargeable in any type of bankruptcy.  Contact our Detroit bankruptcy lawyer at www.BankruptcyTrack.com or call us (248) 281-6299.

Although most debts are able to be discharged in bankruptcy, there are a few that will survive. Some of the most common nondischargeable debts are:

  • Student loans (regardless of whether they are government or private loans)
  • Alimony, spousal maintenance and child support
  • Debts arising from fraud or other wrongful conduct
  • Trust fund taxes (i.e., sales tax, payroll taxes)
  • Some income taxes
  • Debts (other than support) arising out of a divorce or property settlement agreement (nondischargeable in Chapter 7 only).

Contact our Detroit bankruptcy lawyer at www.BankruptcyTrack.com or call us (248) 281-6299.

Probably not. When you file either a ​Chapter 7 straight bankruptcy or a Chapter 13 payment plan case, you’ll be able to structure it so that you can keep your vehicle. Most people who file bankruptcy do not lose those items, but it depends on their value and the exemptions allowed in the state in which you file bankruptcy.

No. In most instances, federal laws protect retirement accounts when a person seeks relief from their debt through a Chapter 7 or Chapter 13 bankruptcy filing. Our Detroit, Michigan bankruptcy attorney at Bankruptcy Track can explain how the filing options can provide a fresh start without negatively affecting the funds in the retirement plan. Most of not all retirement accounts are exempt, regardless of value, which means that the bankruptcy trustee does not have a right to liquidate them on behalf of your creditors.

Yes. However, most individuals are able to rebuild their credit within a few years. If you are currently contemplating bankruptcy, then it is likely that your current credit rating has already been affected. A discharge of your current debt may provide the opportunity to rebuild your credit with steady, regular payments on a new account.

The Fair Credit Report Act, 6 U.S.C. Section 605, is the law that controls credit reporting agencies. The law states that credit reporting agencies may not report a bankruptcy case on a person’s credit report after 10 years from the date the bankruptcy case is filed. Other bad credit information is removed after seven years.

Yes, if exempted. When you file bankruptcy, all of your assets become a “bankruptcy estate”. The estate includes your real estate; tangible things like cars and household goods; bank accounts; tax refund and legal rights.When considering bankruptcy in Detroit, Michigan, it is important to know how your assets will be treated in chapter 7 or chapter 13 bankruptcy. When you file for bankruptcy, your refund, even if you have yet to file for that year, is considered an asset by the bankruptcy court. Just the same as other assets, if your refund is exempt the court, the creditor or the bankruptcy trustee does not have the legal right to take it from you.If the refund is large enough, and if it cannot be protected with Federal or Michigan State exemptions, it can be taken away from you and made payable to your creditors. The individual who would take it is known as the Chapter 7 Trustee, who is charged with marshaling your assets, liquidating them and paying the proceeds to your creditors. If you have any questions, contact our Detroit bankruptcy lawyer at www.BankruptcyTrack.com or call us (248) 281-6299.