Brooklyn, Jackson County Bankruptcy Attorney
Financial stress isn’t just about your checking account. It can affect nearly every aspect of your life, from your mental health to your relationships. Financial difficulties may be one of the most frightening and overwhelming aspects of a person’s life.
At Marrs & Terry, our experienced Michigan bankruptcy attorneys understand what you and your family are going through. Our comprehensive approach to helping you manage your finances and understand your bankruptcy options sets our team apart. We aim to help get you on solid ground again, rebuilding your life and finances. We want to offer you hope and viable legal solutions to your situation.
For Brooklyn or Jackson County residents who feel hopeless about their financial situation, our legal team wants you to know help is available. Contact our office today to arrange a confidential legal consultation to discuss your situation and learn more about your bankruptcy options.
What Is Bankruptcy?
Chances are you’ve heard the term, but many people are still confused about the ins and outs of bankruptcy and what it can do. Bankruptcy is a legal process that allows individuals and businesses to get out of debt when financially unstable. It is often referred to as a way for people to achieve a financial “clean slate.”
There is still a bit of a stigma surrounding bankruptcy, so some people try hard to avoid it. However, when unexpected things happen, such as a job loss, divorce, or a significant illness or injury, even stable families can suddenly find themselves in a precarious financial position and need legal and financial help. Bankruptcy is a tool that may be useful in getting you or your family back on the right financial track.
Moving forward with bankruptcy depends on your unique financial position. Several options exist for individuals in a financial hole, including Chapter 7 and Chapter 13 bankruptcies.
Understanding Chapter 7 Bankruptcy
The first bankruptcy option for Brooklyn and Jackson County residents is filing for Chapter 7 bankruptcy. Chapter 7 is also commonly referred to as straight bankruptcy or liquidation because it typically involves selling or liquidating assets to help pay back a portion of a person’s debts. During Chapter 7 bankruptcy, a court-appointed trustee helps oversee the liquidation process, selling your assets to help pay creditors. Remaining unsecured debts are generally “discharged” or erased.
Unsecured debts are those not backed by collateral. Unsecured debts are a riskier investment for creditors. Chapter 7 can help individuals eliminate unsecured debts, including:
- Credit cards
- Personal loans
- Medical bills
- Past due utilities
- Judgements or garnishments
One of the misconceptions about Chapter 7 bankruptcy is that when you file, you will lose everything. That is not the case. While it is true that some assets may be sold to help pay back creditors, there are exemptions that help people protect items of value, such as their home, vehicle, some personal property, and the tools of a person’s trade.
There are exemptions specific to Michigan as well as federal exemptions. An experienced attorney can review your situation and help you determine which set of exemptions provide the most benefit for you. Michigan allows an individual to choose which exemption list they use, depending on their financial situation.
The benefits of filing Chapter 7 can include:
- Preventing creditor harassment and collections
- Halting foreclosure and repossession
- Preventing further wage garnishment
- Permanent discharge of unsecured debts
- No repayment plan
However, there are also drawbacks that individuals must consider. First, you must ensure you are eligible to file for Chapter 7 bankruptcy in Michigan, especially if you earn more than the state median.
Generally, if your income falls below the Michigan median for your household size, you are exempt from the means test and can file Chapter 7. If your household income is higher than the median, you may still be eligible to file, but you’ll be subject to the means test calculations and need to ensure you have valid deductions to meet eligibility guidelines.
Additionally, Chapter 7 bankruptcy cannot erase secured debts backed by collateral. In some cases, you may apply to reaffirm the commitment to repay the original loan.
There is also the potential for losing non-exempt property. Any property you own that doesn’t fall into the allotted allowance for an exemption will likely be sold by the trustee to cover your unsecured debts.
Finally, you’ll want to consider your credit situation. A Chapter 7 bankruptcy can linger on your credit report for up to ten years, making it more challenging to secure loans and lines of credit for several years.
Chapter 13 Bankruptcy
Individuals in the Brooklyn and Jackson County communities may prefer to file for Chapter 13 bankruptcy. Instead of liquidation, Chapter 13 allows a person in debt to reorganize their current debt. Whereas Chapter 7 seeks to sell assets and discharge the remaining unsecured debt, Chapter 13 creates a payment plan to tackle that debt, making it easier for a person to pay off. The amount of money you must repay creditors depends on several factors, including your income and debt. An aggressive bankruptcy attorney negotiating on your behalf can also impact your situation.
When you move forward with Chapter 13 bankruptcy, debts are reorganized in a payment plan. The trustee, the creditors, and the bankruptcy court must approve the payment plan. The plan should be structured so that you pay a portion of the unsecured debt you owe. Typically, payments are structured in three or five-year plans.
Some of the benefits to filing for Chapter 13 bankruptcy include:
- Aggressive creditors are banned from hounding you
- You can avoid collections and lawsuits
- You can restructure your debts
- You get to keep your assets
- It can prevent foreclosure and repossession
Another benefit of filing for Chapter 13 is that it is less damaging to your credit. A Chapter 13 filing typically falls off your credit report after seven years. Individuals who may not qualify to file for Chapter 7 may find they are eligible to file for Chapter 13.
A Michigan Bankruptcy Attorney Is Ready to Help You
You don’t have to be embarrassed or ashamed of considering your bankruptcy options. Bankruptcy is a tool, and the legal team at Marrs & Terry can help you use that tool to get your finances back on track and rebuild your life.
If you live in Brooklyn or Jackson County and want to learn more about how bankruptcy can help you get a fresh start, contact our office today. At Marrs & Terry, we have helped numerous people solve their legal and financial issues and build a brighter future for themselves and their families.
Directions to Our Office
Whether you live in Brooklyn or Jackson County, our office is easy to find. Follow these directions or call our office at 734-663-0555 for more assistance. We are here to help.
From the North:
- Take MI-52 S toward Adrian
- Continue onto South Main St (BUS-223)
- Destination will be on the left
From the South:
- Take US-23 N toward 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 toward Adrian
- Turn right onto S Main St.
- Destination will be on the right.