Almost nothing causes more stress and anxiety in relationships and everyday life than financial struggles. When you can’t make ends meet or feel overwhelmed by debt, you need guidance and reassurance, not judgment.
At Marrs & Terry, our knowledgeable Michigan bankruptcy attorneys understand what you are going through and the pressure financial strain can put on you and your family. Our legal team can evaluate your financial situation and walk you through your options for finding a fresh start. One of those options may be filing for bankruptcy. Misconceptions and misinformation about the process have given bankruptcy a stigma. However, it can be a valuable tool to help you reclaim your financial footing.
If you want to learn more about bankruptcy and your options for getting out of debt, contact our office today and arrange a confidential legal consultation. We proudly work with clients in Homer and throughout Calhoun County.
Understanding Bankruptcy in Homer and Calhoun County, Michigan
There are numerous misconceptions about bankruptcy and how it can impact your financial future. When considering whether bankruptcy is right for you, you need to understand the process and what it means to file for bankruptcy in Michigan.
Bankruptcy is a legal process that individuals and businesses can use to find relief from debt and financial instability. In many cases, it helps to offer people a “clean slate,” allowing them to return to a more stable and sustainable financial position.
Unfortunately, the unexpected can always happen. Divorce, job loss or unemployment, and significant illness can throw you a curveball and make it challenging to keep up with bills and living expenses. Without a financial safety net, you can quickly find yourself unable to keep pace with the cost of living. Bankruptcy works by “discharging” specific or qualifying debts, stopping creditors from harassing you, freeing you from your financial burdens, and potentially halting foreclosure or repossession proceedings.
Several types of bankruptcy may offer debt relief for individuals living in Homer or Calhoun County. These options can also uniquely affect your credit score and repayment plans to creditors.
Types of Bankruptcy
Individuals and families considering bankruptcy should be aware of two primary types of bankruptcy filings. There are benefits and drawbacks to each that can affect your ability to keep certain assets or seek credit and loans in the future.
Chapter 7 is the most common form of bankruptcy for individuals. It is a straight bankruptcy or liquidation that can discharge or erase qualifying debts. Through Chapter 7 bankruptcy, a court-appointed trustee helps oversee liquidating or selling assets to pay back creditors.
Michigan has an exemption list that outlines assets that can be protected as you file for bankruptcy. These guidelines help protect specific personal property, tools of the trade, motor vehicles, and equity in your home, meaning you should not fear losing everything because you file for bankruptcy. These exemptions help offer people a fresh start without forcing them to give up certain property or assets. In addition to Michigan’s bankruptcy exemptions, there are also federal exemptions. A skilled attorney serving the Homer and Calhoun County areas can help you understand which exemptions may benefit you since Michigan allows you to choose whether you want to use state or federal exemptions.
Chapter 7 can eliminate unsecured debts, including:
- Credit cards
- Personal loans
- Medical bills
- Past due utilities
- Judgments or garnishments
Unsecured debts are those not backed by collateral, such as a home or car. Since unsecured debts are riskier for creditors, they tend to be accompanied by higher interest rates and stricter approval requirements.
Chapter 13 bankruptcy is another potential option. It offers a debt reorganization plan rather than requiring liquidation. Chapter 7 bankruptcy discharges your debt, while Chapter 13 reorganizes it, making paying it off more manageable. The amount you must pay creditors under Chapter 13 depends on your earnings, debt, and other factors.
During Chapter 13 bankruptcy, your debts are reorganized, and the court establishes and approves a payment plan. This plan allows you to pay back a portion of your unsecured debt. These payment plans can range from three to five years.
Benefits of Filing for Bankruptcy
There may be several strategic benefits to filing for bankruptcy. However, the benefits can vary depending on whether you file for Chapter 7 or Chapter 13. Overall, bankruptcy can help you manage your financial situation by:
- Preventing creditor harassment and collections
- Stalling foreclosure
- Preventing repossession
- Preventing further wage garnishment
- Help you avoid lawsuits
Some of the more specific benefits that apply to a Chapter 7 bankruptcy filing include:
- Permanent discharge of unsecured debts
- No repayment plan is necessary
- Almost immediate relief from aggressive creditors and collections
The benefits of filing for Chapter 13 bankruptcy include:
- Restructuring of your debts
- Ability to keep your assets
- Less damage to your credit score
Bankruptcy can help you better manage your finances and ease the worry and stress of paying your bills.
What to Consider When Choosing a Bankruptcy Option
One of the benefits of seeking an experienced Michigan bankruptcy attorney is that they can evaluate your situation and outline which option is best for your unique financial situation. On the surface, many people look to Chapter 7 bankruptcy because it allows you to discharge your unsecured debt. However, some drawbacks include meeting the Chapter 7 bankruptcy eligibility guidelines per the means test if you are a higher-income filer.
If your income is below the Michigan median for your household size, you are exempt from the means test and can file Chapter 7 bankruptcy. If your household income is higher than the median, but you have expenses that may be deductible, you may still be eligible to file, but you’ll be subject to the means test calculations.
Chapter 7 cannot erase secured debts, you may lose non-exempt property, and your credit score can take a hit for up to 10 years post-bankruptcy. Chapter 13 bankruptcy allows you to keep your assets and drops off your credit report sooner than a Chapter 7 filing. Those not eligible to file for Chapter 7 may be eligible to file for Chapter 13.
Let a Michigan Bankruptcy Attorney Help Guide You
People considering bankruptcy may think they don’t have the money to seek legal help. However, attempting to go through the bankruptcy process alone is seldom in your best interest and could add to your financial strain. At Marrs & Terry, our bankruptcy team can guide you through the process and support you during this challenging time.
Contact our office today to request a confidential consultation. We have a long track record of helping Homer and Calhoun County community members rebuild their lives through bankruptcy.
Directions to Our Office
If you live in Homer or greater Calhoun County, here’s how to easily find our office at 247 S Main St, Adrian, MI 49221:
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 towards 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.bankruptcy can resolve your financial troubles.