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Wayne County Bankruptcy Law Blog

Proactive homeowners may be able to prevent foreclosure

Although many economists say that the worst of the recession is behind us, financial challenges may still be dogging a lot of good people in Wayne, Michigan. When a person is facing medical debt, credit card debt and big mortgage payments each month despite a stagnant or lowered income, things can get out of hand quickly.

If a consumer falls behind on their mortgage payments, they may get scary letters from the mortgage lender. It is important that these communications not be simply ignored. There is a very real danger that a homeowner may end up losing their home.

Christian book store creditors to vote on Chapter 11 bankruptcy

Michigan residents may be aware that Family Christian Stores, a Christian gift and book store, is currently working through the Chapter 11 bankruptcy process. In this newest step, the company's creditors will elect on August 7 whether to approve a proposed Chapter 11 bankruptcy plan. This election would let Family Christian Stores' creditors vote on a plan, which must be approved by 51 percent of those voting in the election and 67 percent of the amount of money represented by each vote.

Navigating the process of Chapter 7 Bankruptcy

There is an undeniable level of stress that comes with a seemingly never-ending mountain of debt. Those who find themselves in such situations can often get overwhelmed by the debt in question and this can sometimes make the decision process of deciding how to escape the debt much more difficult. However, there are options that allow individuals to have a fresh financial start. One of these is Chapter 7 bankruptcy.

When an individual becomes buried under medical bills, credit card debt or various types of loans, Chapter 7 bankruptcy provides an immediate discharge of one's debts. These types of debts are known as "unsecured debts." Unsecured debts are not tied to any kind of psychical property such as a home or car. There are, however, some types of unsecured debts that may not be dischargeable under Chapter 7, including child support, taxes, student loans and others.

Learn about the means test for Chapter 7 bankruptcy

One of the more popular options for Michigan consumers seeking a fresh financial start is Chapter 7 bankruptcy. You may have heard that consumers wishing to file for Chapter 7 bankruptcy must pass a means test. What is the means test? This blog post provides some basic information on what the means test is and how it could affect your filing for Chapter 7.

The means test consists of two steps. The first step is a comparison of the consumer's income with the median income in the consumer's state. Specifically, the bankruptcy court computes the consumer's average monthly income during the six-month period before the Chapter 7 bankruptcy petition was filed. This figure is then compared with the median family income for the consumer's state of residence. If the median family income in Michigan is greater than or equal to the consumer's income, the consumer will be allowed to proceed to the second step of the means test.

What are the steps in a Chapter 13 bankruptcy?

Perhaps you are a Wayne County consumer who is struggling with debt and looking for possible solutions to your problem. Maybe you've read some of our blog posts and have decided that Chapter 13 bankruptcy might be a good option. How does a consumer file for Chapter 13 bankruptcy?

According to the U.S. Bankruptcy Code, the first thing a consumer must do is attend credit counseling. The idea is to determine whether a consumer will be able to repay their debts without filing for bankruptcy. With credit counseling, a consumer will provide their income, debt and expense information to an approved credit counseling agency. The agency will then propose a repayment plan.

How should you repay debt?

The economy has been rough on many Michigan residents for the past several years. Since the Great Recession began in 2008, many people have had to learn to live on less. For many, this has meant to during to credit cards to pay medical debt and everyday expenses. In some cases, this debt has become overwhelming leading to late payments, high interest and penalties. Some may be experiencing frequent, embarrassing or harassing calls from creditors trying to collect on these past-due bills.

If you are in this situation, you may be wondering -- how should I repay my debt? While this blog post cannot provide specific advice for a particular situation, people should know that debt relief options are often available to help people regain a handle on their debt.

Role of the U.S. trustee in a Chapter 11 bankruptcy

When a business is struggling financially, the business may choose to file a Chapter 11 bankruptcy. In a Chapter 11, the business will be given the opportunity to reorganize while being protected from its creditors. If the bankruptcy is successfully completed, the company will have the opportunity to emerge stronger and debt free. However, before a business can get to this point, there are many complex business bankruptcy issues that must be addressed.

These issues are often handled by the bankruptcy trustee. According to the U.S. Courts, the bankruptcy trustee is responsible for managing many aspects of a Chapter 11 bankruptcy. First and foremost, the trustee supervises the process. During a Chapter 11 bankruptcy, the business will make payments to creditors as it runs its business. The trustee is responsible for overseeing these payments.

Company awaits bankruptcy judge's decision on its future

The bankruptcy courts exist to help people break free from their overwhelming debt. It can be a way for people to get a fresh start in their lives. However, bankruptcy can do the same thing for businesses. Chapter 11 bankruptcy, and other business bankruptcies can give businesses a fresh start after facing financial difficulties.

Christian retail book giant Family Christian Stores filed for bankruptcy protection in February as it faced $127 million in debt. According to reports, the retail chain was never able to recover from losses suffered during the Great Recession. Additionally, the company has faced declining sales and profits due to a shift from paper to electronic media. In 2008, the company made $305 million, but in 2014, the company only made $230 million. The book chain is expected to make around $216 million this year.

What is the discharge in bankruptcy?

When facing overwhelming debt, Michigan residents may turn to bankruptcy in order to get a fresh financial start. Without bankruptcy, they may not be able to pay their bills as they become due. As a result, they are often subject to harassing and embarrassing calls from creditors and collection agencies. Filing for bankruptcy can immediately offer some relief to the petitioner. However, in order to get long-term debt relief, people must obtain a discharge.

According to the United States Courts, a bankruptcy discharge is the legal mechanism that relives people of their obligation to pay their debts. A discharge is an order by the bankruptcy court that permanently removes personal liability for the debts listed in the bankruptcy petition. The discharge is generally automatic in a Chapter 7 bankruptcy as long as no objections were made to the proceedings.

Chapter 13 bankruptcy lets wage earners get back on their feet

For Michigan residents who find themselves with a lot of debt, the option of bankruptcy may be something worth considering. Maybe some unexpected healthcare expenses have suddenly given people more debt than they bargained for. Or, maybe that great business idea you had just didn't pan out. In these cases, a Chapter 13 bankruptcy might be something to consider.

What are the advantages of Chapter 13 bankruptcy? Chapter 13 allows a homeowner with overdue house payments to save their home from foreclosure. As mentioned in a previous post, when a Chapter 13 bankruptcy case is filed, the court imposes an automatic stay. This prevents collection actions -- such as collection calls and foreclosure actions -- from continuing.

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