What is Consumer Bankruptcy?
Under Federal law, bankruptcy is both a legal process and a right granted to every individual. It provides individuals a means to get financial freedom when they become unable to pay their debts or bills. Depending on the type of bankruptcy applied for, it can result in the discharge of borrowers’ debts, or an opportunity for them to catch up on missed payments to avoid losing their property.
Bankruptcy eliminates debts
Consumer bankruptcy helps you manage your debts by wiping out most (if not all) your debts or removing your payment obligation. As soon as you file your bankruptcy, the court releases an order (called the Automatic Stay) which prevents creditors from making any attempts at collecting from you.
Bankruptcy prevents harassment
Declaring bankruptcy stops your lending company from garnishing your wages and demanding payments from you. In addition, if your utilities have been cut because of any overdue payments, filing bankruptcy will help you have these services restored. Moreover, if a creditor fraudulently tries to collect more than what you owe him or her, you can challenge the claim through bankruptcy.
Bankruptcy protects your properties
Aside from preventing creditor harassment, bankruptcy also halts home foreclosure as you can be granted with an extended period for repaying missed payments. But you need to keep in mind that filing bankruptcy cannot remove liens and mortgages on your property. Bankruptcy can also stop the seizure of your car or another valuable asset. If one of your properties has been repossessed before your date of filing, bankruptcy can have the lender return it to you.
When should I file for bankruptcy?
It is a good time to file for bankruptcy when the following conditions apply to you:
- You are in a financially troubling situation and believe that there is no way for you to pay back your debts
- It will be hard for you to make your creditors agree to new payment terms
- You fear the possibility of a lender suing you for missed payments or seizing your assets to serve as payment for your balances
When any of these applies to you, you should closely consider filing for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, which are the most commonly filed types of bankruptcies by individual borrowers. Our Michigan bankruptcy lawyers can guide towards financial freedom!
Which debts are not discharged in bankruptcy?
Make no mistake: a bankruptcy will not cure all of your financial woes. There are certain limitations as to which types of debts are eliminated in a Michigan bankruptcy. Under the bankruptcy law, you cannot eliminate the following debts in your bankruptcy petition:
- Unpaid alimony and child support
- Student loans
- Tax debt
- Fines and penalties to due criminal activity or la-breaking
- Personal injury-related debts
- Debt of cosigners or guarantors
- Debts incurred post-bankruptcy
What type of bankruptcy is right for me?
At HS&A, P.C. Law, our passionate and caring lawyers understand that bankruptcy is not an easy decision to make. This is why we help our clients pick the right type of bankruptcy for them. Through years of experience, we have helped us guide over 10,000 toward financial freedom.
We help file the following types of bankruptcy:
- Chapter 7 Bankruptcy. Often referred to as straight bankruptcy or liquidation bankruptcy, this type helps debtors wipe dischargeable debts in exchange for giving up certain properties to pay back creditors. Which properties will be sold off and which will remain would depend on state exemption rules.
- Chapter 13 Bankruptcy Also referred to as reorganization bankruptcy, this type allows a debtor to propose a payment adjustment plan before the bankruptcy court and lenders. You can get immediate relief from creditor calls or property foreclosures and unlike a Chapter 7 bankruptcy, you do not have to lose your property. Most borrowers are eligible for this type of bankruptcy.
Here at HS&A, P.C. Law, your entire case will be personally handled and evaluated by your bankruptcy attorney. Your bankruptcy attorney will guide in selecting the best legal option that works best for you during your initial consultation. We offer each client a free consultation and a free credit rebuilding program to help you attain that fresh financial start that you look forward to. What are you waiting for? Contact us today to schedule your consultation!