If you’re struggling with crushing debt in Lenawee County, filing for bankruptcy in the Bankruptcy Court for the Eastern District of Michigan can give you a fresh start free of debt. Contact Marrs & Terry, PLLC, today for an initial case evaluation with a bankruptcy lawyer serving Manitou Beach-Devils Lake and get the advice you need to help you decide whether this step is right for you.
Understanding Bankruptcy
Bankruptcy allows individuals and organizations to resolve debts that they can no longer afford to pay. A bankruptcy proceeding can provide a debtor with significant legal protections, such as the immediate imposition of a stay on all collection proceedings by creditors, which bars creditors from sending collection letters, making collections calls, filing or prosecuting lawsuits, or seizing collateral. Bankruptcy allows a debtor to resolve their outstanding debts in an orderly manner; at the conclusion of a bankruptcy case, a debtor may receive a discharge of some remaining debts, releasing the debtor from any further obligation to pay those debts.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, also known as liquidation bankruptcy, involves a debtor selling, or “liquidating,” their assets to obtain money used to repay their debts. An individual wishing to file for Chapter 7 must meet the means test, which examines whether the debtor has sufficient disposable income to repay debts over five years.
In a Chapter 7 bankruptcy case, a court-appointed trustee gathers and sells the debtor’s non-exempt assets and uses the proceedings to pay creditors per the rules established by the Bankruptcy Code. A debtor can keep certain exempt property in Chapter 7 proceedings. State and federal law provides lists of property exempt from liquidation in Chapter 7, including:
- A “homestead exemption,” equal to a specific value of equity in a primary residence
- Household goods, subject to per-item and aggregate maximum values
- Equity in a single motor vehicle, subject to a cap
- Retirement accounts and public employee pensions
- Public benefits, such as welfare benefits, unemployment compensation, workers’ comp, or crime victims’ compensation
- Life insurance policies and disability, health, and mutual life insurance benefits
- A portion of earned but unpaid wages
Michigan law also allows debtors to retain computer equipment, tools of the trade, and farm animals, feed, and crops up to statutory caps on total value. Debtors can also keep all their clothing (except furs), family pictures, prescribed health aids, medical equipment, and burial plots and rights. Under federal law, debtors can use a “wildcard exemption” to keep property otherwise not exempt by the federal list, with the amount of this exemption dependent on whether a debtor used their homestead exemption.
At the conclusion of a Chapter 7 bankruptcy, the court may discharge remaining debt balances, except for non-dischargeable debts like loans guaranteed by the government, child support, alimony, and certain taxes.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy, also known as “wage earner’s” bankruptcy, allows a debtor to reorganize and repay debts over a three- or five-year period. In a Chapter 13 bankruptcy proceeding, a debtor proposes a plan to use their disposable income to pay their debts. Individuals may file for Chapter 13 bankruptcy if they have unsecured and secured debts of less than $2.75 million.
After filing for Chapter 13 bankruptcy, a debtor must submit a proposed repayment plan to the court. The plan must pay priority claims—such as alimony and child support, back taxes, and costs of the bankruptcy proceeding—in full unless a creditor agrees to a different treatment. For secured debts, a debtor may keep the collateral if the plan proposes to pay the creditor at least the fair market value of the collateral.
Chapter 13 plans do not have to repay unsecured claims in full if the debtor pays all disposable income and the plan pays unsecured creditors at least as much as they would have received in a Chapter 7 bankruptcy. In a repayment plan, a debtor turns over their disposable income to a trustee, who pays creditors per the plan’s terms. When a debtor complies with their repayment plan, they may receive a discharge of most remaining debts.
Chapter 13 provides several potential advantages over Chapter 7 bankruptcy. First, homeowners can use Chapter 13 bankruptcy to stop foreclosure of their home. The automatic stay can stop foreclosure proceedings, and the debtor can repay past-due mortgage payments during the repayment period. Chapter 13 also allows debtors to reschedule payments on secured debts over the duration of the repayment plan, which might lower payments. Finally, Chapter 13 may mean a debtor does not have to sell assets to fund repayments of debts.
How Can a Bankruptcy Attorney Help You Resolve Debt
Filing for bankruptcy can be a confusing, stressful process. Fortunately, it’s not one you have to undergo on your own. Experienced legal representation can provide you with guidance and support throughout. When you turn to a bankruptcy attorney from Marrs & Terry, PLLC, for help with your bankruptcy case in Manitou Beach-Devils Lake, you can expect our firm to:
- Carefully review your financial and personal situation to identify your legal options for resolving your debts
- Sit down with you to discuss bankruptcy and alternatives to help you make an informed decision about how to proceed
- Gather the financial information and records needed for your bankruptcy filing
- Prepare and submit your petition and other filings throughout your case
- Represent you in court and advocate for your rights and interests at each stage, including during creditors’ meetings and plan confirmation/discharge hearings.
Why Choose Marrs & Terry, PLLC?
For over 20 years, clients have trusted the legal team at Marrs & Terry, PLLC, to help them through the bankruptcy process because:
- Our attorneys have built a proven reputation for helping clients obtain fair and favorable resolutions to legal and financial issues over the decades.
- We believe that every client knows what is best for them. Our team will listen to your needs, goals, and concerns to develop legal solutions tailored to your situation.
- Our firm works hard to support our clients throughout their cases. We will provide you with the information and advice you need, and we won’t hesitate to let you know if we think you are about to make a poor decision. Ultimately, though, we know and respect that decision belongs to you.
Contact Our Firm Today to Discuss Your Options
When your debts have become too large to afford, bankruptcy can offer a clean slate that puts you on the path toward a brighter financial future. An experienced bankruptcy attorney from Marrs & Terry, PLLC, can help you determine whether this is the best solution for you. Contact our firm today for a free, confidential consultation to discuss your legal options for resolving financial difficulties in Manitou Beach-Devils Lake.
Directions to Our Adrian Office
Individuals and families considering bankruptcy to resolve crushing debt can speak to an experienced attorney at our Adrian office at 247 S. Main Street, Adrian, MI 49221. To reach our office:
From the North:
- Take MI-52 S towards Adrian
- Continue onto South Main St (BUS-223)
- Destination will be on the left
From the South:
- Take US-23 N towards Adrian
- Turn right onto South Main St (BUS-223)
- Destination will be on the right
From the East:
- Take US-223 W toward Adrian
- Turn left onto S Main St.
- Destination will be on the right.
From the West:
- Take US-223 E towards Adrian
- Turn right onto S Main St.
- Destination will be on the right.