Enough is Enough

Bankruptcy Attorney in Grand Haven, MI: West Michigan Bankruptcy Lawyers

Is It Time to File for Bankruptcy?

Are you having a tough time economically? Do the bills keep piling up and you have no means to pay? Unemployment continues to be at an all-time high, and many homes are under foreclosure. Several businesses have closed and many people are in desperate economic shape. But how do you determine whether or not to file bankruptcy? When is it time to admit “enough is enough.” Various factors go into determining whether a person should file bankruptcy and the experienced Bankruptcy Attorneys at Van Tubergen, Treutler & Hayes, PLLC are here to help make this process a little less painstaking so you can achieve a fresh financial start!

Bankruptcy Information

Some Advice

What are the financial problems that have caused your economic distress? Do you have credit card debt? Are you in foreclosure? Have you received overdraft notices from your financial institution? Are you receiving repeated telephone contact from collection agencies?

While you may try to work your way out of the above problems, that task may become overwhelming. Perhaps it is time to eliminate much of this debt by filing a bankruptcy case. A Chapter 7 bankruptcy is designed to discharge most consumer and individual debt to achieve a fresh start. A Chapter 13 bankruptcy is designed to protect your personal assets (in particular, your home) while allowing you to pay a portion of your debt and discharge the remainder of the debt.

Recently, the most common reasons that consumer and individual debts have been discharged include credit card debt, foreclosure actions, massive medical bills, personal lines of credit, and personal guarantees on business lines of credit or commercial leases.

Be advised that certain debts are not dischargeable in bankruptcy. These include recent tax debt, student loans, alimony or child support, criminal penalties or restitution, and fraudulent transfer of assets.

Some assets are either partially or wholly protected under either a Chapter 7 or Chapter 13 bankruptcy. They are pensions and IRAs, several thousand in home equity, certain automobiles, bank accounts, and personal injury settlements.

Protecting assets while discharging debts often requires skillful case preparation. To protect assets by transfer to relatives or to other financial vehicles to avoid creditors can jeopardize a bankruptcy case causing a Trustee to recapture such assets or even to dismiss a case. This office can provide you with sound advice regarding a bankruptcy case which will lead to a solution to your financial crisis.

Do You Qualify?

The past few years have created a hard time financially for many people and with the slow recovery, this year seems to follow that pattern as well. Many people have bills that pile up and have no means to pay. High unemployment rates and home foreclosures are still regular features of the economy. Equally, many small businesses have closed and left owners in rough personal financial straits. To cope with these situations many have considered filing bankruptcy. In order to assess your situation, there are various factors to consider before determining whether bankruptcy is the best choice for your situation. Here are some factors to consider.

Chapter 7

If you are unemployed and have no other means of support, you may qualify for Chapter 7 bankruptcy. This is determined by a Means Test. This is a form used by the bankruptcy court to compare your income with families of like size and location. For example, if your family income is below the average median income in your area and you have no other way to pay your bills and other creditors the bankruptcy court may approve your filing under Chapter 7.

When your filing is accepted by the bankruptcy court, a Trustee will be appointed to evaluate your petition and schedules to determine any non-exempt assets. These assets will be sold by the Trustee to pay off your creditors to the extent possible. There are many items you will be allowed to keep so that you do not become destitute. A list of current exemptions appears elsewhere on this website for your reference. The remaining debt will be discharged by the court. Once a discharge has taken place you have a fresh start without the burden of past financial mistakes.

Chapter 13

If your family income is beyond the median for a family of your size and in your location, you may be eligible for a Chapter 13 bankruptcy. Also, if your debts are such that they cannot be released by the court under Chapter 7, this may be a proper alternative. In a Chapter 13 bankruptcy, the court will confirm a plan of repayment for all or part of your debt on a schedule that your income can sustain. Such a repayment plan will pay off debt over a three-to-five-year period at lower than your current rates. Thus, you must have a steady income and available assets in order to file a Chapter 13.

A Chapter 13 will prevent your home from going into foreclosure because once filed, an automatic stay is imposed by the bankruptcy court. This can be overcome by a creditor that is successful in having the court set aside the stay in your case. In order to avoid that happening, your plan must cure any past-due mortgage payments over a reasonable time. If this cannot be done, then you may have to surrender your home in bankruptcy. If you do file under Chapter 13, you must continue to make regular payment on secured items you wish to keep, such as your house or automobile.

Because bankruptcy filing is not a simple process, people need support from their family and friends. Having to part with some assets because of emotions can be difficult. For this reason., you should consider using the services of a bankruptcy attorney to help you in this process. This office can provide you with the help you need.

Chapter 7 or Chapter 13

At some time, your financial situation may become so difficult that you have to rely on filing bankruptcy. When this occurs, you will need to decide which form of bankruptcy to choose. The two major forms of consumer bankruptcy are Chapter 7 and Chapter 13. These bankruptcy forms are designed to ease and remove your debts by paying off as much debt as possible under your particular circumstances.

Chapter 7 bankruptcy is designed to liquidate your assets while exempting certain necessary items that you are allowed to keep. Other non-essential items may be sold by the bankruptcy Trustee to pay off creditors to the extent possible. The end result is that the bankruptcy court discharges all of your debt, and you receive a fresh start.

Upon filing a Chapter 7 bankruptcy, the bankruptcy court will appoint a Trustee to handle your case. The Trustee is charged with distributing any non-exempt asset you have to pay off your creditors. The Trustee will review your case and notify creditors if you have any such non-exempt assets for which they can file a claim for proceeds. These proceeds are all that creditors can recover, and therefore, they cannot harass you any further regarding your debt. Once your case has been completed, your debt is discharged, and you are no longer liable to repay it.

There are two important facets of a Chapter 7 bankruptcy to keep in mind. First, there are the exemptions created by both state and federal law. A bankruptcy attorney will help you determine which set of rules you should use to allow you to keep many of your assets. Second, is that any debt acquired by fraud, or an illegal transaction will not be discharged, and you will still be liable to repay that debt.

A Chapter 13 bankruptcy involves creating a plan of reasonable repayment for some or all of your debt. Such a plan is developed by your attorney and the Chapter 13 Trustee for your particular case. The repayment plan will be implemented over a three-to-five-year period and should create more feasible debt payments than you currently have. Once the plan is completed, the balance of debt is discharged.

Within 30 to 45 days of filing for Chapter 13 bankruptcy, you must begin payments to the Trustee assigned to your case. The Trustee then distributes this money to creditors according to your confirmed plan. Confirmation of your plan takes place before a bankruptcy court judge, but for the most part, you will only deal with the Trustee assigned to your case. As in the Chapter 7 bankruptcy, your creditors will not be able to harass you concerning your debt.

Once you have filed a Chapter 13 bankruptcy, it is your responsibility to follow the plan and payment schedule. If your employment situation changes or you become divorced or seriously ill, it may be necessary to modify your plan. Under certain circumstances, a Chapter 13 can be converted to a Chapter 7. If your situation changes drastically, you should contact an attorney for assistance in resolving the matter. As in Chapter 7, bankruptcies, not all debts are dischargeable. For example, student loans and taxes you may owe.

Basic Steps in Filing Bankruptcy

Thinking about filing bankruptcy? During this stressful time, this process may seem to be overwhelming and burdensome. Here are the basic steps.

First, review your finances and compare them against your monthly expenses. It is critical that you know who you owe and how much is owed to them. Take all of your bills and sort them into a list of creditors and how much is owed to each of them. While this exercise may increase stress, simply ignoring this information won’t make it go away. This is the first step in organizing yourself. If you need help ask a trusted family member or friend to help you in this process. The most important thing is to be sure you have an accurate list.

Second, try to modify any outstanding loans or debts by contacting the creditors. Some of them may choose to modify your payment plans or accept a lower amount. Explain to the creditor that you are trying to take care of your outstanding debts and that you would like to work with them to accomplish that goal. Usually the first telephone contact you have with the creditor will be a person that does not have the authority to change payment terms or accept a reduced payoff. If so, ask to speak with a supervisor about your situation. Keep a record of the dates of contact and the person you talked to and what was discussed.

Third, keep aware of any legal actions of foreclosure or judgments. If a foreclosure or judgment is coming up, you know that the court is involved and there is a timeline to be followed. Know the dates and any limitations that have been placed on your situation. If a foreclosure is coming you need to contact an attorney to assist you and help you through the next steps.

Fourth, hire an attorney if you need to file bankruptcy. Representing yourself can be a disadvantage in many cases. Creditors are well-versed in collection matters and will likely be represented by attorneys at this point. It is their job to try and collect the debt and they can make this process more challenging for you. While hiring an attorney may seem to be a difficult expense, it may be the best step you can take at this time. A bankruptcy attorney will help you through this process and provide you with the needed relief you are seeking.

Fifth, take the credit counseling class as required by the bankruptcy process. There are two required classes, one prior to filling and one following your meeting with the Bankruptcy Trustee. Your attorney will offer you a list of agencies, which provide this service via telephone or online. The cost for these services is around $25 per class and under certain conditions, these fees can be waived. The pre-bankruptcy instructional course is about personal financial management, and a completion certificate is required in order to file bankruptcy. Your attorney cannot file a bankruptcy petition until you complete this course. The pre-discharge counseling is to be completed after your meeting with the Trustee from the bankruptcy court. Your discharge will not be issued until you have received the certificate of completion from the agency you chose and it has been filed with the court.

Sixth, file your bankruptcy petitions after completing the above steps. Your attorney will use your documents and interview information to complete some thirty or so pages to be electronically filed with the bankruptcy court for your jurisdiction. By getting all of these documents together for the attorney promptly, this process can be accomplished in a few days. The bankruptcy petition itself can be filed rapidly but accompanying schedules must then be completed within two weeks. Once these items are filed, the court and your attorney will advise you of the next steps in the procedure.

Seventh, you must attend a Section 341 Hearing or Creditors Meeting that will be scheduled by the court. This is usually done about 30 days after the petition is filed. At this meeting, the Trustee assigned to your case will ask you questions regarding your outstanding debts and current situation. Your attorney will also be present for this meeting. You must bring a photo ID and your Social Security Card to this meeting for identification purposes. These meetings are recorded and you will be placed under oath to give testimony. The Trustee is another attorney that works for the court and these hearings are less formal than courtroom hearings. If questions are fully answered the Trustee will close the hearing. If the Trustee requires further information the hearing may be adjourned to a later date. If only documents are required by the Trustee, you will not be required to attend a subsequent hearing if they are promptly provided.

Finally, you will receive your Discharge Order from the bankruptcy court by mail about 60 days after the Section 341 Creditors Meeting. This is notice that your filing is complete and your case will be subsequently closed when the court finishes its administration. Please be aware that some debts are not subject to discharge such as student loans or tax arrearages. Your attorney will advise you concerning those debts which you still owe, some of which may require signing a Reaffirmation Agreement with the Creditor.