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Charles J. Schneider, P.C.
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Livonia, MI 48150
Phone: 734-237-1523
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Wayne County Bankruptcy Law Blog

Creating a repayment plan that works for you

When facing financial challenges, people have a variety of debt relief options. Some of these options might be a "quick fix" while other may require some significant work. When people are considering Chapter 13 bankruptcy, in particular, they are often looking to solve significant financial issues. They may want to keep their home, car or other expensive good, while relieving some debt.

In order to do this, Chapter 13 bankruptcy requires that people have some sort of income. Then, part of this income is used to pay down the debt over a period of three or five years. Before the bankruptcy, people will be given the opportunity to create a repayment plan for these debts. This plan must meet certain legal requirements in order to be accepted by the court. For example, a person's surplus income must be used to pay creditors during the repayment period.

Understanding Chapter 13 and its benefits

It's not unusual for people in Wayne County to face various financial issues that make it necessary for them to consider options to get a fresh financial start. One such option is Chapter 13 bankruptcy. Filing for Chapter 13 must be fully understood before moving forward with it. Chapter 13 is useful for people who have a job and earn a living. The process lets eligible people come up with a plan to pay what they owe. A repayment plan will be proposed and paid in installments so the debt is cleared in three to five years.

The amount the person filing earns will determine whether or not they will be approved for Chapter 13. If the person's income is lower than the applicable state median, then the plan must be for three years unless there is a court approval. A debtor who has an income per month that is higher than the applicable state median will usually have a plan for five years. No Chapter 13 bankruptcy can be for more than five years.

Dealing with credit card debt and conquering it

Unfortunately, encountering financial problems, no matter how small, is not uncommon for Michigan residents. While some individuals and families are able to timely and fully address these temporary issues, others are not so lucky. For some credit card holders, debt can rack up quickly, causing it to become unbearable. For these individuals, it is important to understand ways to better manage their debt and conquer their financial troubles.

Dealing with credit card debt is not an easy task, but a recent report by Fox Business broke it down into four methods that could assist debtors with their current and future debt. Whether they use one, some or all of these methods, if properly used and consumers change his or her spending habits, the debtor could obtain a healthy financial life.

What is debt restructuring for credit card holders?

When financial problems are present your life, they tend to impact and extend to all areas of your life. Dealing with debt can be extremely troublesome and worrisome, causing residents in Michigan and elsewhere in the nation to consider their options to deal with this debt that seems to be never ending. Because filing for bankruptcy is sometimes considered as a last resort to obtain debt relief, it is important that individuals consider debt restructuring.

What is debt reconstruction? For consumers struggling to deal with their credit card debt, debt restructuring is a way to address their financial problems. Although credit card companies do not publicize these strategies, a debtor could communicate with their credit card company regarding a hardship program.


All too frequently clients have said the following words, "Filing bankruptcy is the last thing I thought I would ever do", when the filing of a bankruptcy should have been thought of sooner. No one plans to file bankruptcy when they take out debts. The overwhelming majority of Americans voluntarily pay their debts. Credit card companies and other lenders count on this fact. Clients sometimes engage in strategies that may backfire in order to avoid filing bankruptcy.

The following strategy was engaged in by a client of another lawyer whose bank accounts had been garnished by creditors. In order to avoid further garnishments, the client decided to deposit the money from his paychecks into his mother's bank account to shield it from the garnishing creditors. This arrangement continued for over a year. He would later file bankruptcy and say that his mother paid his bills at his direction. He would state that at no time would his mother use his money for her purposes. He was in charge of the account. She was merely a delivery person acting upon his instructions. He had to, after all, take care of his family making sure his family would eat. It was his money.

Credit card debt rose for average U.S. citizens last year

Many Michigan residents are aware of the allure of credit cards. Credit cards offer the ability to pay for goods and services that a person may not otherwise be able to afford at the time. Sometimes, however, this allure can prove to be destructive - a fact millions of Americans can attest to. Countless people have experienced the nightmare of being trapped with credit card debt. To escape this trap, drastic measures often must be taken. Bankruptcy is one such measure.

Michigan residents may be shocked to learn just how high the total amount of outstanding credit card debt was in America last year. A year prior, the total was $606.75 billion, an enormous number. But as of December, that number is ever higher - outstanding credit card debt increased to $642.4 billion.

Let us explain how Chapter 7 can work for you

When people are struggling with overwhelming debt, it can be difficult to see a way out of the situation. People may be so wrapped up in trying to make ends meet that they don't even consider their other financial options. The pressure placed on a person by creditors, bills and other obligations can make the future seem bleak.

For Michigan residents in this situation, bankruptcy might be a good solution. While people may think that bankruptcy has a stigma, people need to understand that it is just a legal process to help those in need. Not only will filing for Chapter 7 bankruptcy stop all collection efforts by creditors, it will erase many of a person's consumer debts. These debts include medical debt, credit card debt and other unsecured personal debt -- like personal loans.

Stopping creditors with the automatic stay

When Michigan residents are facing overwhelming debt it can be scary. People may be concerned with how they are going to feed themselves, pay their bills, keep a roof over their head and pay for transportation to work. Creditors can make these fears even worse with their constant calls, threatening letters and legal action. Michigan residents may not know where to turn or how to even begin to get out of debt. People may know that bankruptcy can take months to complete, but need immediate relief.

Thankfully, bankruptcy laws provide immediate relief in the form of the automatic stay. When a bankruptcy petition is filed, the automatic stay goes into effect. The automatic stay automatically stops creditors in their tracks. Once the stay is in place, creditors are no longer allowed to take any action against a person to collect a debt. This powerful tool can give people some much needed breathing room as they sort out their financial issues.

What options does one have in a business bankruptcy?

Michigan business owners take pride in their work in building a successful business. However, sometimes, certain measures must be taken in order to prevent a company from falling under. Bankruptcy is one such measure that many business owners choose to take in order to restructure their businesses and keep the company alive. With bankruptcy, there are many laws involved and business owners often have a number of options available to them.

Business bankruptcy can take the form of Chapter 7, Chapter 11 or Chapter 13 bankruptcy. Each bankruptcy option has its own unique facets and knowing the differences can help business owners decide which options are best for them. It sometimes is a necessary first step to consult with an attorney before making such decisions, though. The initial consultation with an attorney may entail filling out an intake questionnaire and providing all necessary documentation. The business owner and the attorney then decide together whether or not bankruptcy is the right course of action.

One in 5 consumer credit reports affected by medical debts

As many Michigan residents are aware, in today's world, it can be difficult to avoid debt. With credit cards that offer ease of use and medical bills that can be impossibly expensive, debt is a reality that many Michigan residents have to face. Once mired in debt, it might seem like escape is all but impossible. However, for those stuck in a seemingly endless cycle of debt, there are options.

Debt is so common, in fact, that recent reports show that 1 in 5 consumer credit reports are affected by medical debts. According to a recent study by the Consumer Financial Protection Bureau, however, these debts usually total hundreds of dollars, not thousands. For low-income households, though, this is still a serious concern and many avoid getting the medical care they need because they fear falling further into debt.

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