Have you become unable to afford minimum payments on your credit card bills or started missing mortgage payments? While this is an undeniably difficult situation to be in, you should know you may have options to resolve your financial distress. Filing for bankruptcy can help you get a clean slate, free from debt and ready to move forward with optimism.
However, bankruptcy is not something you should pursue alone. Instead, you should get help from an experienced bankruptcy lawyer serving Saline, Michigan—like the ones you’ll find at Marrs & Terry. Our team is standing by to discuss your legal options for obtaining debt relief. Our firm will take the time to identify the right solutions for your situation, provide the information and advice you need to make informed decisions, and guide you through each step of the bankruptcy process, should you choose to file. Contact us today for an initial consultation, and let’s move forward together.
Understanding Bankruptcy
Bankruptcy gives people who cannot afford to pay their debts a legal option for obtaining a fresh start in their financial lives. Depending on which form of bankruptcy they pursue, an individual may liquidate assets to pay creditors or establish a multi-year repayment plan. No matter which form of bankruptcy a person chooses, they may obtain debt relief at the end of their case through the bankruptcy court’s discharge of remaining debts.
Although bankruptcy provides a powerful form of debt relief, there are also certain downsides that should be carefully considered before filing. Most importantly, a bankruptcy filing will remain on an individual’s credit report for several years, making it challenging to obtain credit or other financial services after their bankruptcy. However, many find that the benefits afforded by this fresh start far outweigh any disadvantages in the long run.
How Can Bankruptcy Help You?
Filing for bankruptcy can provide several crucial benefits as you pursue debt relief., including the following:
- Automatic stay: A bankruptcy filing automatically imposes a stay on debt collection efforts. Under the automatic bankruptcy stay, a creditor or debt collector may not undertake debt collection efforts, including sending debt collection letters, calling the debtor, or filing collection lawsuits. Creditors or debt collectors who violate the automatic stay may face penalties. Any creditor or debt collector wishing to commence or resume debt collection efforts during a debtor’s bankruptcy case must seek approval from the bankruptcy court.
- Debt discharge: At the end of a bankruptcy case, the court may order the discharge of a debtor’s remaining eligible debts. A bankruptcy discharge can give a debtor a fresh start, free and clear of unsustainable debt.
- Debtor-in-possession: In some Chapter 13 bankruptcy cases, a debtor may become a “debtor-in-possession,” which means the debtor retains ownership and control over their assets instead of turning them over to a bankruptcy trustee. Debtor-in-possession status may allow a Chapter 13 filer to keep their home or vehicle as they get current on payments and restructure outstanding loans on those assets.
Types of Bankruptcy for Individuals
The Bankruptcy Code offers two primary forms of bankruptcy for individuals: Chapter 7 bankruptcy and Chapter 13 bankruptcy.
Chapter 7
Under Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, an individual can obtain debt relief by undertaking asset liquidation to generate cash to pay creditors. This means the debtor turns over most of their property to a bankruptcy trustee, with the debtor keeping property that federal bankruptcy or state law deems “exempt” from liquidation.
After selling non-exempt assets, the trustee pays the proceeds to the debtor’s creditors according to bankruptcy law. The bankruptcy court then gives the debtor a discharge of any remaining eligible debt, which means the debtor no longer has any obligation to pay that debt, and creditors may not attempt to collect that debt. Although a Chapter 7 debtor may lose a lot of property in bankruptcy, they can gain a fresh start quickly.
Individuals may file for Chapter 7 bankruptcy if they meet various eligibility criteria. Filers must complete a credit counseling course in the 180 days preceding their bankruptcy filing. They must also meet the means test to qualify for Chapter 7, which evaluates whether an individual has sufficient gross income or disposable income to afford debt payments under a repayment plan in Chapter 13 bankruptcy.
Chapter 13
In a Chapter 13 bankruptcy, also known as a “wage earner’s” bankruptcy, a debtor repays their creditors under a three- or five-year court-approved repayment plan. A debtor has the first opportunity to propose a repayment plan for the court’s approval, although creditors may have a chance to propose alternative plans. Once the bankruptcy court approves a repayment plan, the debtor will make regular payments to a bankruptcy trustee. In turn, the trustee will disburse those funds to the debtor’s creditors according to the repayment plan terms and bankruptcy law.
Chapter 13 bankruptcy may offer debtors several advantages over Chapter 7, including the option to stop foreclosure of their home and restructure debts to extend payments over the repayment plan term. Upon completing their repayment plan, a debtor may receive a debt discharge that frees them from the obligation to pay any remaining balances on various types of debt.
Individuals can file for Chapter 13 bankruptcy after completing a credit counseling course. Filers may qualify for Chapter 13 if they have less than $2.75 million of combined secured and unsecured debt.
Why Choose a Bankruptcy Attorney from Marrs & Terry?
Going through bankruptcy alone can be a stressful process. Having an attorney in your corner can give you the support and guidance you need to pursue debt relief. But what should you look for in a prospective bankruptcy lawyer, and how do you know one’s right for you?
For more than two decades, people in Saline, Michigan, have trusted the legal team at Marrs & Terry to guide them to tailored solutions because of our:
- Experience – We have decades of combined legal experience guiding clients through bankruptcy and helping them reach their goals. We have a proven track record of securing favorable resolutions for clients’ legal issues and putting them on the path toward financial peace of mind.
- Honesty and transparency – When you choose Marrs & Terry, you can expect complete honesty and transparency from your attorney. We never sugarcoat the truth or tell you only what you want to hear. If we think you might be making a wrong decision, we will tell you. However, we recognize that you have the final say, so we will provide you with the knowledge you need to make an informed choice. Our lawyers want to help you find realistic solutions to your financial issues.
- Dedication to results – Our attorneys will take the time to listen to your story and understand what’s most important for you and your family. We will work tirelessly to help you pursue your short- and long-term goals, providing advice and support at each stage of your bankruptcy case.
Contact Us Today for an Initial Case Evaluation to Discuss Your Options
If you can no longer make credit card or mortgage payments or pay other bills, bankruptcy might be the best way forward. Contact Marrs & Terry today for a confidential consultation with an experienced attorney about whether this major step is right for you and how we can take it together.