Have you found yourself unable to make payments on your mortgage, car loan, student loans, or credit cards? When debts become unmanageable, bankruptcy can give you a clean slate to work toward better finances. However, bankruptcy represents a drastic option for resolving debts. If you’re considering filing for bankruptcy in Leslie, MI, a compassionate attorney with Marrs & Terry, PLLC, can provide you with the information and advice you need to decide whether it’s the right choice for you. Contact our firm for an initial case evaluation to learn more about your rights and options from a bankruptcy attorney serving Leslie.
Understanding Bankruptcy
Bankruptcy is a legal process that provides relief to individuals who cannot afford to pay their debts. Depending on the specific bankruptcy procedure, individuals may reorganize their debts in a repayment plan or sell off assets to make partial payments. At the end of bankruptcy, the bankruptcy court discharges most remaining debts, relieving the individual from any further obligation to pay the debt.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, also called liquidation bankruptcy, involves selling (“liquidating”) a debtor’s assets to generate funds to pay off creditors. A debtor must sell most of their assets in a Chapter 7 bankruptcy, although state and federal law provides lists of assets exempt from liquidation, including:
- Equity in a primary residence up to a specific amount (the “homestead exemption)
- Household goods up to per-item and aggregate value limits (including furniture, books, jewelry, and appliances)
- Equity in a single motor vehicle up to a specific amount
- Retirement accounts, including simple/traditional/Roth IRAs and public employee pensions
- A portion of earned but unpaid wages
- Public benefits, including welfare, unemployment compensation, workers’ compensation benefits, Korean/Vietnam War veterans’ benefits, and crime victims’ compensation
- Life insurance policies and disability, health, and mutual life insurance benefits
State law also allows debtors to exempt specific values of computer and computer accessories, tools of the trade, farm animals, feed, and crops. Michigan law also fully exempts clothing (except furs), family pictures, prescribed medical equipment/health aids, and burial plots/burial rights. Federal law provides a “wildcard” that allows debtors to exempt property up to a specific total value, with this maximum value dependent on whether a debtor uses their homestead exemption.
A debtor may “affirm” secured debts, such as mortgages or car loans, allowing them to keep the asset if they can prove that they can afford to pay those debts based on their current income and assets.
In Chapter 7 bankruptcy, after the court-appointed trustee liquidates a debtor’s non-exempt assets and pays creditors, the bankruptcy court will discharge any remaining dischargeable debts. A bankruptcy discharge releases the debtor from any further obligation to pay the debt, and the creditor may not file legal actions or take any other collection efforts for a discharged debt. Bankruptcy law exempts some debts from discharge, including:
- Alimony
- Child support
- Various taxes
- State/federal student loans
- Other loans guaranteed by the government
- Certain personal injury/property damage judgments
- Certain criminal restitution obligations
To qualify for Chapter 7 bankruptcy, a debtor must be an individual or business entity that qualifies under the means test. This test examines a debtor’s income and expenses to determine if the debtor has sufficient disposable income to pay their unsecured debts over five years. Debtors who fail to qualify for Chapter 7 bankruptcy may have to file Chapter 13 bankruptcy.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy, also called reorganization or “wage earner’s” bankruptcy, involves repaying a debtor’s debts over three or five years. In Chapter 13, a debtor proposes a repayment plan to make installment payments for the plan’s duration. Chapter 13 bankruptcy offers several advantages over Chapter 7, including allowing debtors to save their homes from foreclosure by stopping foreclosure proceedings under the automatic bankruptcy stay and repaying delinquent mortgage payments over time. Chapter 13 allows debtors to reschedule debt payments throughout the repayment plan, which can sometimes lower payments. Ultimately, Chapter 13 allows debtors to avoid selling assets to repay creditors.
An individual may file for Chapter 13 bankruptcy if they have total debts of less than $2.75 million. However, individuals cannot file if, within the past 180 days, they had another bankruptcy filing dismissed due to willful failure to appear or comply with court orders or due to a voluntary dismissal sought by creditors.
In a Chapter 13 bankruptcy plan, a debtor must pay priority claims (e.g., back taxes, child support, alimony, the costs of the bankruptcy proceeding) in full. The plan must also propose to pay creditors at least as much as they would have received in Chapter 7 bankruptcy. Debtors also agree to pay all income deemed disposable to the bankruptcy trustee, who distributes the funds to creditors per the repayment plan. Creditors who follow the terms of their repayment plan can receive a discharge of eligible remaining debts.
How Can a Bankruptcy Attorney Help You Resolve Debt
Bankruptcy can involve complex forms and court procedures. A bankruptcy attorney from Marrs & Terry, PLLC, can guide you through the bankruptcy process by:
- Reviewing your personal and financial circumstances to determine your eligibility for the various forms of bankruptcy
- Advising you on whether bankruptcy is the right option for resolving your financial difficulties
- Helping you gather financial information and documentation needed to assemble your bankruptcy filings
- Preparing your filings and representing you in court throughout your bankruptcy case, including during creditors’ meetings or plan confirmation and discharge hearings
Why Choose Marrs & Terry, PLLC?
For over two decades, individuals and families in Leslie, MI, have turned to the attorneys of Marrs & Terry, PLLC, to help them navigate bankruptcy because:
- We have built a proven record of success and helped clients achieve excellent results when faced with legal and financial difficulties.
- Our firm has six conveniently located offices throughout Michigan.
- Our attorneys believe that our clients know what is most important to them, so we take the time to listen to their stories and understand their needs, concerns, and goals to develop case strategies tailored to their objectives.
- We take the time to educate our clients on their options at each stage to help them make informed decisions that protect their rights and interests.
Contact Our Firm Today to Discuss Your Options
If you’re deep in debt in Leslie, bankruptcy can give you a fresh start toward financial health. Contact Marrs & Terry, PLLC, today for a confidential consultation with an experienced bankruptcy attorney serving Leslie to discuss your options for resolving your financial issues.
Directions to Our Jackson Office
Clients considering bankruptcy to resolve their financial troubles can speak to an experienced bankruptcy lawyer at our nearby office in Jackson, MI, located at 209 E. Washington Ave., Suite 258, Jackson, MI 49201. To reach our office:
From the North:
- Take US-127 S toward Jackson
- Turn left onto W. Michigan Ave
- Bare right onto Wildwood Ave
- Continue onto W. Washington Ave
- Destination is on the right
From the South:
- Take US-127 N towards Jackson.
- Merge onto BUS-127 towards Jackson
- Turn left onto E Washington Ave.
- Destination is on the left
From the East:
- Take I-94 W towards Jackson.
- Merge onto US-127 S toward Jackson
- Turn left onto W. Michigan Ave
- Bare right onto Wildwood Ave
- Continue onto W. Washington Ave
- Destination is on the right
From the West:
- Take I-94 E towards Jackson
- Merge onto US-127 S toward Jackson
- Turn left onto W. Michigan Ave
- Bare right onto Wildwood Ave
- Continue onto W. Washington Ave
- Destination is on the right