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Wayne County Bankruptcy Law Blog

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.

Things to consider before filing for personal bankruptcy

Personal bankruptcy can be an effective way for people dealing with financial challenges to get rid of paralyzing debt. Many people have compared it to a reset button for people looking for relief from overwhelming debt. Still, the decision to file for bankruptcy is a major life decision for Wayne County residents, and it is a good idea to consider a number of factors before taking the plunge.

The first thing to consider is alternatives to personal bankruptcy. Bankruptcy is just one of a number of possible ways to deal with debt. In order to get a clear view of your situation, it may be worthwhile to take a close look at your finances, including the nature and sources of your debt and the possible consequences of a number of actions. You may find that there would be no serious consequences to not filing for bankruptcy. You may also find that negotiating with one major creditor may be more effective and less hassle.

Medical debt will stay off credit reports longer under changes

When a medical emergency occurs people generally go to a medical professional for help. In these situations, the last thing on many Michigan residents' minds is the cost of the care. They often just want the doctors, nurses and other medical professionals to do whatever they can to fix the issue and get them on the road to recovery.

Following the emergency, however, the medical bills will start coming in. Often these bills can be astronomical -- even for simple medical issues. Even people with health insurance can be surprised to see how much they owe following a medical emergency. Many people cannot afford to pay these bills or are locked in a struggle to get an insurance company to pay for them.

What is Chapter 7 bankruptcy and how does it work?

Wayne County consumers looking for a fresh financial start have probably heard of Chapter 7 bankruptcy and may be wondering how it could help them. This blog post describes the basics of Chapter 7 and how it could help a consumer obtain debt relief.

In a successful Chapter 7 bankruptcy, a consumer enjoys immediate and complete relief from dischargeable debts. Dischargeable debts include credit card debt, other kinds of unsecured debt and medical bills. Dischargeable debts do not include child support and student loans. These debts are very difficult to eliminate through bankruptcy.

Michigan steel manufacturer files for Chapter 11 bankruptcy

Michigan business owners know that expanding operations can be a good and necessary step to maintain their position in the marketplace and even grow. Conducting an expansion can be a bit of a gamble: The rewards can be big, but an expansion can also be harmful if the timing or execution isn't right. One area business seems to have had this kind of experience.

Lee Steel Corp. is a steel manufacturer that employs 65 people at three Michigan locations, including one in Wayne County. A few weeks ago, the company filed for Chapter 11 bankruptcy. Court records indicate that Lee Steel owes over $50 million to its creditors.

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