Should I file for Bankruptcy?
Yes, if you can not pay your bills as they come due or your are about to lose some of your property to a creditor. Another reason is the amount of stress your financial situation is placing on your family. High stress levels are not healthy and can disrupt one’s personal and family relationships.
How will filing affect my credit?
If you are considering filing bankruptcy, your credit is probably already in trouble. Filing for bankruptcy is generally better than having a foreclosure on your credit report. You can recover from a bankruptcy filing in much less time than a foreclosure or repossession. And the myth that you can not get credit for seven years is just not true.
Is a Chapter 7 or Chapter 13 my best option?
Generally, I think a Chapter 7 is the best option. It is a streamlined process that is over in just a few weeks. Chapter 13 is a payment plan that lasts three or five years. And the payment amount set by the court can be very difficult for many people to live with. Under the new 2005 laws, some people with high incomes will be forced to file a chapter 13. I will examine this issue during our first meeting.
I am current on all my bills, and I have never been late, Can I still file?
Yes. The fact that you have been able to ‘make it’ does not mean you do not qualify for bankruptcy. Usually people have placed themselves in extreme hardship to get the bills paid on time. There always reaches a point where they can no longer do it. You do not need to wait until you are behind to contact us for help.
Will my employer or landlord find out that I am filing bankruptcy?
Maybe, but usually not. Only creditors are contacted by the court. And notice of the bankruptcy is not placed in any major newspaper. It is published in a legal news journal. However, there are hundreds of filings each publication. Your employer or landlord does not have the time to read all of the listings each week.
Does my spouse have to file bankruptcy with me?
No. A married person may file as an individual. The filing does not affect the credit of the other spouse. It also does not place their property at risk.
Can my employer legally fire me for filing?
No. This is now illegal. Not too many years ago, many West Michigan employers routinely fired employees who filed. Thank goodness those days are gone.
Can I go to jail if I do not pay my debts (and do not file bankruptcy)?
No. The United States does not and never has jailed anyone who has not paid a debt. This is why we left England many years ago...remember? Oddly, this question keeps coming up.
Can I keep my credit cards?
Yes, you can keep cards that do not have a balance owed on them. However, some credit card companies, when they learn of your bankruptcy, may cancel your card. And of course, if you file bankruptcy on a credit card, that company will not give you a new card and line of credit.
Will I receive a 1099 for the amount of the debts discharged?
No. This is one of the big advantages of bankruptcy over a debt consolidation.
Can I run up my credit cards before I file?
No. This is a crime and a fraud on the creditors. We hear of this occurring now and again and advise that you do not do it. And if the creditor’s can prove that you did this, your right to file bankruptcy may be take away.
Should I file on my utility bills?
Usually not. Utility bills are not really debts. They are just monthly bills. If you are way behind on your bills, the answer may be yes. And if the bill was from a prior residence, the answer is always yes.
Can I give away property before I file?
No. You are allowed to give gifts if the total is under $600. If the amount is over $600, the trustee may be able to take the property back from the person you gave it to or take away your right to file bankruptcy.
Can I pay back family members before I file?
No, do not do this. If this has already occurred, we will need to examine the amount of the payments and how long they have been paid to determine what the court will do.
What is the ‘means test’?
The Means Test is really an income qualification tool to determine if you are allowed to file a Chapter 7 Bankruptcy or if you must file a Chapter 13 Bankruptcy. Individuals over a certain income must file Chapter 13. Most people in Michigan do not exceed these limits.
I had my driver’s license taken away for not paying a judgment, will bankruptcy get it back for me?
Yes. This is probably one of the biggest advantages of bankruptcy over any other form of financial assistance we provide. Upon your filing, we send a copy of the bankruptcy notice to the Michigan Secretary of State and they will then allow you to re-apply for your license.