Why is it legal
to file bankruptcy?
More so than in
any other time in
our country's
history, our economy
is based on consumer
debt. In fact, in
this age of
multibillion dollar
corporate bailouts,
easy credit and
relentless
bombarding of
seductive messages
cajoling us to
"charge, consume,
buy" it is not
surprising that so
many people are
drowning in debt.
For many of us,
this debt is
insurmountable and
is causing family
problems and
feelings of
hopelessness and
even suicide. With
credit card interest
rates of 18-27%,
many feel like
modern day
indentured servants.
Many times, the debt
is occasioned by
unforeseen events
such as loss of a
job or medical
bills, but more
often it is simply
poor planning.
Nevertheless, in
instituting our
bankruptcy laws,
Congress recognized
that responsible,
well-intentioned
people could from
time to time run
into financial
problems. By
allowing you to
recover from your
debt burden you will
be able to start
afresh, look to the
future and become a
more productive
member of society.
This is good for you
and good for society
as a whole.
Bankruptcy - An
Overview
Even the hardest
workers and the most
diligent bill-payers
can find themselves
with more debts than
they can pay as they
become due. In such
cases, filing
bankruptcy may
provide a solution
to what seems like
an insurmountable
problem. If you or
someone you know is
facing serious
financial
challenges, it is
very important to
seek the counsel of
an
experienced
bankruptcy attorney.
Once considered a
last resort,
bankruptcy has
evolved into an
accepted method of
resolving serious
financial problems.
The bankruptcy
lawyer's goals are
to help debtors make
a fresh start and
ensure that
creditors get paid.
A skillful attorney
can guide you
through the
complicated legal
maze of bankruptcy.
Bankruptcy law
is primarily federal
in origin and
therefore varies
little from state to
state. The United
States Constitution
grants to Congress
the power to
establish uniform
bankruptcy laws
throughout the
United States, which
ensures consistency
and predictability
in how bankruptcy
proceedings are
conducted. The
individual states
do, however, retain
jurisdiction over
certain
debtor-creditor
issues that are not
addressed by and do
not conflict with
federal bankruptcy
law, such as which
property remains
exempt from
creditors' claims.
Commercial and
Consumer Bankruptcy
Both businesses
and individuals may
file for bankruptcy.
Commercial
bankruptcy is a
remedy available to
businesses that are
unable to pay their
debts. Options
include liquidation,
in which many of the
business's assets
are sold and the
proceeds are divided
among the creditors,
and reorganization
or restructuring, in
which the business
continues to operate
according to a plan
that allows for at
least partial
payment to
creditors.
Consumer bankruptcy,
by contrast, is a
method by which
individuals may be
able to get out from
under insurmountable
debt and make a
fresh start, albeit
with a negative
impact on their
credit ratings. As
in commercial
bankruptcy, there
are two options:
liquidating assets
to pay off
creditors, and
filing a wage-earner
plan that allows the
debtor to retain
more assets while
working to pay off
his or her debts. An
experienced
bankruptcy attorney
can help you choose
the right course of
action for your
particular
situation.
Bankruptcy law
provides two basic
forms of relief: (1)
liquidation, and (2)
rehabilitation, also
known as
reorganization. Most
bankruptcies filed
in the United States
involve liquidation,
which is governed by
Chapter 7 of the
Bankruptcy Code. To
qualify for
Chapter 7 in Detroit,
an individual debtor
has to satisfy a
financial means
test. In a Chapter 7
liquidation case, a
bankruptcy "trustee"
collects the
debtor's "nonexempt"
property (as opposed
to the property that
the debtor is
allowed to keep and
that is not subject
to the creditors'
claims) and converts
it into cash. The
trustee then
distributes the
resulting funds
among the various
creditors according
to an order of
priority described
in the Bankruptcy
Code. Not all
creditors receive
the full amount owed
through this
process; in fact,
some may receive no
payment at all. When
liquidation and
distribution are
complete, the
bankruptcy court may
discharge any
remaining debts of
an individual
(non-business)
debtor. If the
debtor is a
corporation, it
ceases to exist
after liquidation
and distribution,
and there is
therefore no reason
for further
discharge because
the creditors cannot
seek payment from an
entity that no
longer exists.
Chapter 11 or 13
Reorganization
In a
rehabilitation or
reorganization, the
option often
preferred by the
courts, creditors
may be provided with
a better opportunity
to recoup what they
are owed. This type
of bankruptcy is
governed by Chapter
11 or
Chapter 13 of
the Bankruptcy Code.
Chapter 11 generally
applies to
individual debtors
with excessive or
complex debts, or to
large commercial
entities like
corporations.
Detroit Chapter 13,
by contrast,
generally applies to
individual consumers
with smaller debts.
Farmers and
municipalities may
seek reorganization
through the Code's
special chapters,
Chapters 12 and 9,
respectively.
Reorganization
provides debtors
with a greater
opportunity to
retain their assets
if they agree to pay
off their debts
according to a plan
approved by the
bankruptcy court. If
the debtor fails to
adhere to the plan,
however, the court
may still order
liquidation.
Whatever the
Chapter, the
petitioning debtor
must first undergo
an individual or
group briefing
regarding credit
counseling and
budget analysis
skills.
"Voluntary" and
"Involuntary"
Bankruptcies
Most bankruptcy
cases are filed by
the debtor and are
thus considered
"voluntary
bankruptcies"
(although few would
"volunteer" to be in
this position). Once
a bankruptcy
petition is filed,
the debtor is
immediately entitled
to relief from
creditors through
the bankruptcy
procedure known as
the "automatic
stay." The automatic
stay freezes all
debt-collection
activity and forces
creditors to allow
the bankruptcy court
to determine how
payment will be
made.
Not all
bankruptcy
proceedings are
voluntary, however.
Under
Chapters 7 in
Michigan and 11,
creditors, too, have
the option of filing
for relief against
the debtor, in which
case the proceeding
is called an
"involuntary
bankruptcy."
Involuntary
bankruptcies are
allowed only when
certain minimum
thresholds are met;
for instance, there
must be a minimum
number of creditors
and a minimum amount
of debt. The debtor
has the right to
file a response to
an involuntary
petition, after
which the court will
determine whether
the creditors are
actually entitled to
relief. If the court
dismisses an
involuntary
bankruptcy filing
because it has no
merit, the creditors
may be ordered to
pay the debtor's
attorneys' fees,
damages for any
losses the debtor
experienced because
of the bankruptcy,
and even punitive
damages to punish
the creditors for
the frivolous or
abusive filing of a
petition. An
experienced
bankruptcy attorney
can provide
essential advice
whether you are a
debtor considering
voluntary bankruptcy
or facing an
involuntary
bankruptcy
proceeding, or a
creditor seeking
relief through an
involuntary
bankruptcy.
Conclusion
Lawyers specializing
in bankruptcy law in
Detroit Michigan
can help both
debtors and
creditors overcome
obstacles to the
repayment of debt.
Their expertise
often extends beyond
bankruptcy to
include debt
repayment and
collection options
that can circumvent
the need for a
bankruptcy filing.
Experienced
bankruptcy attorneys
have the knowledge
and expertise to
help their clients
get out from under
formidable debt and
emerge as productive
citizens, and can
also assist their
creditor clients in
collecting what is
rightfully theirs.
THE DECISION TO FILE BANKRUPTCY
Filing a Personal Bankruptcy is a financial decision based on your amount of debt, your income, your assets, and your present ability to repay debts. It should be a last resort after you have explored other options. If you have explored those options but realize that you will never be able to pay all of your creditors, you may be a candidate for Bankruptcy.
When the expected time period for the repayment of creditors, in full, exceeds the time it would take to rebuild credit, bankruptcy should be given serious consideration. A good bankruptcy attorney or lawyer could help out with this process. We have been helping Michigan residents file personal Bankruptcy for over 10 years. Instead of struggling with minimum payments for months or years and ending up in the same place you are today, you can use that time to rebuild credit and save money for the future.
If you are in a situation in which you have accumulated more debt than you will be able to repay in the foreseeable future, then you probably will benefit greatly from filing bankruptcy and taking a debt-free fresh start.
By filing bankruptcy with qualified attorneys, you give yourself a chance to rebuild and re-establish credit and staying in line with the law. Many people get too caught up in worrying about how they’re going to incur future debt, when the focus should be on the best way to deal with the debt they have now.
We are a debt relief agency that provides bankruptcy assistance. If you need relief from debt, the best thing you can do is call us as soon as possible at 313-962-4656 or toll free at 888-4Walter or 888-777-FILE in order to set up an appointment. There is no charge for the first office interview and evening appointments are available. We normally recommend that you come in as soon as possible so that your rights can be secured without delay. Many people postpone or put off consultation with a qualified specialist only to make major blunders such as borrowing more money to pay off debts. It is best to have the free consultation instead of waiting to see us as a last resort. When you come to see us, we look at your budget (income and expenses) and analyze the debts involved and advise what course of action to take. Walter Metzen is a Board Certified Specialist in Consumer Bankruptcy Law by the American Board of Certification and specializes in Chapter 13 payment plans and Chapter 7 straight bankruptcy.
Chapter 13 in Detroit Michigan works well for employed persons who can make some type of payment. Chapter 7 is also available for cases where a payment plan is not feasible or appropriate. We will recommend the best action for your case.
With Chapter 13, the payment plan is usually a LOT LESS than what one is paying without the help Chapter 13 offers! We can usually consolidate all debts at a payment that is affordable, and nothing will be lost or given up. The home, car and belongings are protected by the filing of Chapter 13. Also there is automatic protection from creditors upon filing. This means that harassment stops, no one can garnish wages, take property, repossess the car or truck, foreclose on the home, etc. But one needs to file a case in order to get the automatic protection.
On completion of the Chapter 13 plan debts are wiped out, paid, discharged, etc. Chapter 13 can usually pay off debts much more quickly because in most cases the interest and penalties are stopped on your charge and loan accounts. Payment amounts are generally reduced. When you visit us, we can explain how it applies to you, but the relief usually is very dramatic.
In most cases, you do not need to bring money to get your case started. This is true for most Chapter 13 cases since attorney fees are included in the payment. The payment is set based on your budget....your ability to pay. That is why we need to go over your income and expenses in detail. Our office is unique in that we have a computer program which calculates your budget of income and expenses while you watch it on the monitor. You can see the income and expenses broken down as we type it in, and see just where your money goes each month. This enables us to calculate how much you can afford to pay toward your debts very quickly, while you watch us. You just need to know how much you make in a typical week, and how much you spend on house payments, rent, utilities, insurance, groceries, gasoline, etc. House payments and rent are generally not included in the chapter 13 plan unless you are behind. If your mortgage is past due, a chapter 13 can help catch it up and stop a foreclosure from occurring if the case is filed on time. Car payments are usually included in the chapter 13 plan and the car is paid off as part of the plan. Generally, no one can repossess or seize your car or other property once your chapter 13 is filed. Your wages, earnings, bank accounts, and personal property are protected by the Chapter 13 "automatic stay" against creditors.
Chapter 7 is "straight bankruptcy" and discharges most debts without making payments and is appropriate when you cannot afford a payment plan under Chapter 13 or when your circumstances do not warrant a payment plan. The relief under Chapter 7 is very dramatic since the debtor receives an "automatic stay" against creditors.
There is no payment plan under a Detroit Chapter 7 bankruptcy. Most debts are discharged. We can discuss which chapter is best for you.
Information to Bring to the First Interview:
When you meet with us, bring as many of your pay-stubs for a typical work week or biweekly pay period from the past 2 months that you can locate....and if you are married, your spouse should come also, if possible. Sometimes we file for just one spouse, but usually both spouses are on the debts and both need protection . Bring us ALL debts....the NAMES, ADDRESSES, ACCOUNT NUMBERS AND APPROXIMATE BALANCES of EVERY creditor to whom money is owed, if you have a recent credit report bring it, if not, we can get it upon payment of your initial retainer fee. These debts would include car payment and house payment information, and all bills, charge accounts, debts, lawsuits, collection letters, etc. We need the balances owed on all your debts as best as you can estimate them. Exact amounts are not important; approximate amounts are sufficient. We also need to know how much you have earned for the year to date and the prior 2 calendar years. We also need to know the value of your property so bring in a tax statement showing Equalized Value or appraisals on any real estate you own. It is also necessary to list the name and address of your spouse if you are married and your spouse is not filing with you. Information must also include the name and address of anyone on debts with you such as cosigners or guarantors of your debts. If you have cosigned for someone else, or someone has cosigned for you, their name, address and the name and address of the creditor need to be included in the information we prepare.
These contents are general and should not be relied on as legal advice for your case. Every case is different. That is why you should speak to us about your situation as soon as possible. The sooner we can help, the better we can do, usually. There are some deadlines that are important, like foreclosure dates, repossession auctions, etc. If one waits too long, the property is lost for good. It is much easier for us to protect what you have, than to try to get it back for you once it is seized by a creditor! So it is best to consult quickly. Also, the longer one waits, the more interest and late charges are added to balances. Chapter 13 can stop interest and late charges on most debts, so, again, delay generally is not good.
We are conveniently located in Suite 3156 of the Penobscot Building, 645 Griswold Street, Detroit Michigan 48226.
|
Walter Metzen-Bankruptcy
Lawyer-(313)
962-4656-Suite 3156
Penobscot Building,
Detroit Michigan
48226-Serving the
Entire Metro Detroit
Area and Southeast
Michigan for over 10
years |
