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Charles J. Schneider, P.C.
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Livonia, MI 48150
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Wayne County Bankruptcy Law Blog

We can help Wayne, Michigan residents shed a second home

Wayne, Michigan, owners of second homes, rental properties or vacation homes sometimes find that they are unable to keep up with the mortgage payments on these properties. Although these kinds of properties are supposed to provide their owners with a benefit, such as leisure or extra income, sometimes they become a burden. Many people in this position would like to unload the property, but they are unsure how to go about doing that.

Fortunately, there are options for those seeking to shed a second home or property. The staff of the law firm of Charles J. Schneider, P.C. have extensive experience helping their clients with just this kind of problem. This includes clients who have problems of a more complex nature than simply an unwanted second property.

Paper company with Michigan mill files for Chapter 11 bankruptcy

A paper company with a mill in Michigan has filed for Chapter 11 reorganization bankruptcy protection. The company reported that the filing will not impact its daily operations. The company noted that filing for Chapter 11 reorganization bankruptcy is intended to allow it to restructure its debt. According to a representative for the company, it intends to eliminate $2.4 billion in debt and that holders of the funded debt would receive $2.4 billion in equity.

In addition, the company intends to finalize a debtor-in-possession financing package that will equal $600 million to help fund its daily operations as it reorganizes. The company has mills in several states, including Michigan, which is does not plan to close, though it will evaluate the mills for efficiency. Several other mills have been closed. The company has seen a declining demand for its products and an increase in foreign imports, leading to its current situation. The company noted that the filing signals an intention to emerge from the bankruptcy process as a stronger and competitive company as it continues to encounter challenges occasioned by the economic environment.

How do you begin the Chapter 13 bankruptcy process?

Chapter 13 bankruptcy can be a great way for homeowners in Wayne County to stop foreclosure. Chapter 13 allows homeowners and other consumers to set up a repayment plan for their secured and unsecured debts. They can make manageable payments over a three- to five-year time frame, allowing them to catch up on past due debts.

How does a consumer begin the Chapter 13 process? The consumer - or their lawyer - files a petition with the federal bankruptcy court in the area where they live. The court will charge the consumer a case filing fee of $235 and a miscellaneous administrative fee of $75. These can be paid to the clerk when filing or they can be paid in installments if the court agrees.

Converting a Chapter 11 bankruptcy to Chapter 7

A business reorganization under Chapter 11 of the federal bankruptcy code can be a good way for businesses to keep creditors at bay while management reorganizes and modernizes the company. Lots of companies in Michigan have emerged from Chapter 11 bankruptcy and resumed their successful ways.

However, some business owners may not be 100 percent sure of this approach. Some people decide that a liquidation under Chapter 7 would be preferable to a reorganization. The issue of whether a Chapter 7 or a Chapter 11 should be filed is a business decision that a business owner will need to make.

What debts may not be dischargeable in a Chapter 7 bankruptcy?

People in Wayne, Michigan, know that qualified debts will be discharged in a successful Chapter 7 bankruptcy. What is sometimes forgotten is that not necessarily all debts will be eliminated in Chapter 7. There are some debts that may remain after the process is complete.

For starters, creditors or debts not listed in the schedules filed at the beginning of the process may not be eligible for discharge. That is why Chapter 7 bankruptcy filers will want to be sure they have drafted the paperwork correctly for their bankruptcy.

Furniture retailer plans emergence from Chapter 11 bankruptcy

Although economists tell us that the recession is long past and business is booming, business owners in Wayne County may not necessarily agree. Many businesses - especially those that depend on the housing market - are still feeling the effects several years on. One furniture store chain has been struggling recently and has chosen a common route for a fresh start.

RoomStore is a chain of furniture outlets that operate in another state. The housing downturn seems to have hit their business hard. Before the slump began, the company was taking in about $125 million per year. By 2013, that figure was down to $76 million. It was even worse in 2014, when it was down to $71 million. Something needed to be done, and quickly.

Understanding the benefits associated with bankruptcy

Many people believe bankruptcy to be the ultimate financial failure, and a situation that should be avoided at all costs. But, the fact is that depending on a person's situation filing for bankruptcy may be helpful, and may provide a person with a new start and a way to get out of a financial hole.

Chapter 13 can help to stop Michigan foreclosure

One of the most common concerns for people who are experiencing financial challenges in Michigan is fear of losing property and how filing for bankruptcy will affect their ability to keep certain forms of property. This can include a home and a motor vehicle. To avoid having to lose one's home and a vehicle, an effective bankruptcy option is filing for Chapter 13. Before moving forward, it is extremely important to find the type of bankruptcy that is best suited to the individual. If a home and vehicle are concerns, then Chapter 13 might be the proper choice.

If a homeowner is behind on mortgage payments, foreclosure can be avoided through Chapter 13. This is preferable to other bankruptcy options, such as Chapter 7, in which there will be a liquidation. For those who have accumulated equity in properties, Chapter 13 is a protective measure to keep these assets that would have been lost in the liquidation process. Not only can this protect a home and a car, but a business as well. This method will put an immediate halt to a repossession or foreclosure. It allows the debtor to begin the process of getting back into a stronger financial position.

How a Chapter 11 filing affects stockholders and partners

Since a Chapter 11 bankruptcy is a bankruptcy strategy that is often meant to apply to businesses, there are frequent concerns that arise. These involve the debtor in possession and what that means, how the filing will affect the assets, what will happen to shareholders and how a partner might be influenced. Understanding these numerous issues can make the process easier and help people who are considering this option decide if it is the best choice for them.

Businesses can come in different forms including a partnership, a sole proprietorship, or a corporation. The corporation will be in existence separately from those who own it -- the stockholders. If a bankruptcy is filed by a corporation with the corporation functioning as the debtor, the personal assets of those who hold stock in the company are not in danger because of the filing. The value of the stock they hold in the corporation are the only assets at risk. With a sole proprietorship, the owner is the debtor. This does not distinguish among the owners. Since that is the case, the business and personal assets of those who are part of a sole proprietorship will be at risk.

Obligation when filing for Michigan Chapter 13 bankruptcy

Wage earners in Wayne, Michigan, may be eligible for Chapter 13 bankruptcy. This bankruptcy option allows consumers to repay at least part of their balances owed over a specified time period. Once the period has elapsed, the consumer's remaining eligible debts are wiped out, if the consumer has stuck to the plan.

Let's say that a consumer, after consultation with an attorney, has decided to file for Chapter 13 bankruptcy. What must the consumer do to fulfill their obligations under the law?

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