Jump to Navigation
Free Consultation

Contact Form

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Location

Charles J. Schneider, P.C.
39319 Plymouth Road, Suite 1
Livonia, MI 48150
Phone: 734-237-1523
Fax: 734-328-6006
Map and Directions

Subscribe to This Blog's Feed FindLaw Network

Wayne County Bankruptcy Law Blog

How does Michigan Chapter 7 and Chapter 13 bankruptcy differ?

Folks in Michigan have probably heard that most consumer bankruptcy filings are done under one of two chapters of the bankruptcy code. Chapter 7 and Chapter 13 are the two chapters in question. What are the differences between these two? From a consumer's point of view, is one more desirable than the other?

Chapter 7 bankruptcy is also called liquidation bankruptcy. Consumers who are eligible for Chapter 7 bankruptcy will have most of their eligible debts erased after the bankruptcy process is complete. In exchange, some of the consumer's assets may be subject to liquidation to pay-off part of the debts owed.

Chapter 7 bankruptcy and Michigan's bankruptcy exemptions

As we have discussed before on this blog, Chapter 7 bankruptcy can be a good way for people in Wayne, Michigan, to get a fresh financial start after a bad experience with debt. Many people have benefited from this fresh start, rebuilding their credit and getting their lives back on track financially.

One thing that may make some people skittish about a Chapter 7 bankruptcy filing is the fact that the process includes the liquidation of the consumer's property and assets. This is done to compensate the consumer's creditors in part. The bankruptcy trustee will sell off as much property as possible to pay off as much debt as possible before the remainder of the debt is discharged.

Financially literate states have high bankruptcy rates

Wayne County residents who want to increase their level of financial literacy should familiarize themselves with the ways that consumer bankruptcy can help them eliminate debt. This is arguably the take-home message from a recent study that shows how states with higher levels of financial literacy often have higher levels of bankruptcy filings.

The researchers looked at the rates of personal bankruptcy in each U.S. state. Then, the researchers investigated the degree to which high school students in each state receive education on personal financial matters. Many -- but not all -- states require the teaching of financial literacy to high school students before they graduate.

How long does a Michigan Chapter 13 repayment plan last?

Michigan consumers with major financial challenges are probably aware that Chapter 13 bankruptcy may be an option for them. Chapter 13 offers consumers an opportunity to repay part of their qualified debts over a discrete time period. This blog post will provide you with a little more information about Chapter 13 bankruptcy.

Chapter 13 is also called a wage earner's plan. This is because it is geared toward consumers with steady incomes who can pay a certain amount of their incomes each month. Many wage earning consumers will find that Chapter 13 is the only bankruptcy option available to them under federal bankruptcy law.

Don't let business debt problems drag on and on

Many business people in Wayne, Michigan, can consider themselves survivors of one of the worst economic periods since the Great Depression. Huge amounts of capital seemingly disappeared overnight, making things difficult even for the most able business people. As revenues slowed and business debt began to build up, lots of people were put in unenviable positions.

Fast forward seven years, and things have gotten a little better. Still, the recovery has not reached all parts of the economy equally, and plenty of companies and managers are still struggling. We recently told you the story of a Michigan-based retailer that filed for Chapter 11 bankruptcy this year. Due to changes in the retail sector that were not the fault of the business owners, the retailer was having serious problems. The business owners formed a plan that let them maintain control of the company and let it continue as a going concern.

Chapter 7 bankruptcy has positive aspects for consumers

When people talk about Chapter 7 bankruptcy, it's fairly common for much of the emphasis to be on the perceived negative aspects of it. But it's important for consumers in Wayne County, Michigan, to have a complete picture of bankruptcy, including its positive features, before making a decision as to whether to file for bankruptcy or not.

It's common for some accounts of bankruptcy to note that it will affect a consumer's credit for a long time, and it can remain on a consumer's credit report for even longer. However, having a large amount of personal debt can also have an effect on a credit score. With bankruptcy, much of that debt can be wiped off the books, allowing consumers to begin rebuilding their credit sooner.

How does credit counseling work for consumer bankruptcy?

People in Wayne County, Michigan, who are considering bankruptcy may have heard that consumers are required to undergo credit counseling before filing. To some people, this sounds like it could be an unpleasant browbeating and finger-pointing session where a credit counselor spends an awkwardly lengthy amount of time berating consumers for being in financial distress. However, this does not have to be the case. This brief blog post will serve to dispel a few misconceptions that could exist regarding the credit counseling process.

Credit counseling for consumer bankruptcy purposes should not be an overly time-consuming commitment. Typically, such counseling sessions will last no more than 90 minutes. Often they do not last much longer than an hour. Although credit counseling services usually charge a fee for their services -- usually around $50 -- financially strapped consumers may not have to pay under certain circumstances. Counseling organizations are required to provide this service free of charge to those who cannot pay. Be sure to ask for a fee waiver from the organization before the session begins if this is the case.

Former University of Michigan hockey star's bankruptcy continues

Financial issues can hit anyone in Michigan. No matter who it is, what they do and how much money they make, filing for bankruptcy might end up being a necessity to get debts in order and regain a sound financial station. There is nothing to be ashamed of in seeking debt relief, provided the person filing follows the correct path and has legal assistance in doing so.

As some Michigan residents may know, hockey star Jack Johnson has been in the midst of a high-profile bankruptcy. Mr. Johnson had initially claimed that he was in debt for $10 million because his parents allegedly used his money frivolously. However, two of the lenders involved in the case have stated that the parents and Mr. Johnson were working together in taking the loans and are trying to use bankruptcy to get out of paying them back. The lenders are disputing Mr. Johnson's attempts to alter his filing from Chapter 11 to Chapter 7. With a Chapter 7, it is possible to liquidate the assets and give back less to the lenders once the case is settled.

What are warning signs of an unscrupulous debt relief company?

The desire of consumers to get debt relief can be a very powerful motivating force. Wayne County, Michigan, residents facing these issues may have noticed that there are a number of businesses that hold themselves out as able to secure this debt relief for stressed out or overburdened consumers. Normally skeptical members of the public may find the claims made by these companies to be attractive.

The Federal Trade Commission urges consumers to proceed with caution before signing up with a debt settlement companies. Some companies follow better business practices than do others. The government has offered a number of warning signs that a debt settlement company may be more interested in taking your money than actually helping you out.

Eligibility for a Chapter 13 debt discharge in bankruptcy

Chapter 13 bankruptcy is a solution that may be available to wage-earning consumers in Wayne County to help them to get their debt situation under control. Consumers make periodic, manageable payments over a three- to five-year time frame.

What happens once the repayment period is up and the consumer has succeeded in adhering to the plan and making all required payments? The consumer is then eligible for a Chapter 13 debt discharge. In order to get the discharge, the consumer will have to have done up to four things.

Legal Disclaimer