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What Happens to Your Credit After Foreclosure & And How to Rebuild

Wed, 22 Apr 2026 18:43:21 GMT

Are you concerned about how foreclosure could affect your credit score and financial future? In this article, we explore what typically happens to your credit after foreclosure and provide practical steps to rebuild it over time. For residents of Farmington Hill, MI, understanding the foreclosure process and the available foreclosure help options can make a significant difference in protecting your credit and moving forward with confidence.

Understanding the Real Credit Score Impact of Foreclosure

Foreclosure is one of the most serious negative events for your credit profile. After a foreclosure is filed, it remains on your credit report for up to seven years. This notation can cause your credit score to drop significantly, often between 100 and 160 points, depending on your previous credit standing.

The reason foreclosure impacts credit so heavily is that it signals to lenders that you failed to meet your mortgage obligations. As a result, receiving new loans or credit becomes more difficult. You may face higher interest rates, limited loan options, or even denial when applying for mortgages, car loans, or credit cards. Additionally, having a foreclosure on your record can affect your ability to rent housing or obtain favorable insurance rates.

It is important to recognize that while foreclosure has a strong immediate effect on your credit, the damage is not permanent. With time and positive financial behavior, your credit score can recover. The sooner you take steps to address foreclosure, the better your chances of limiting long-term harm.

How Acting Sooner Can Limit Credit Damage

One key point this article highlights is the importance of taking action early if you are struggling with mortgage payments. Rather than allowing foreclosure to proceed unchecked, seeking foreclosure help as soon as possible can help you explore alternatives.

Options like loan modifications, repayment plans, or short sales arranged with the assistance of an attorney or financial professional often result in less severe credit damage than a completed foreclosure. These negotiated solutions can provide relief, help you avoid a full foreclosure process, or at least reduce its negative reporting effects.

Ignoring signs of financial distress can allow foreclosure to finalize, which makes recovery more challenging. For Farmington Hill, MI residents, connecting early with foreclosure help specialists can be a crucial step in protecting your credit and improving outcomes.

The Role of an Attorney in Protecting Your Credit

An experienced attorney from Charles J Schneider PC can play an essential role in safeguarding your credit during foreclosure proceedings. Attorneys are equipped to negotiate with lenders on your behalf, working to secure alternatives that may prevent or delay foreclosure.

Legal professionals review your mortgage documents to ensure lenders comply with all regulations and procedures. Sometimes, attorneys find procedural errors or violations that can stop or delay foreclosure, offering you more time to recover.

Additionally, attorneys provide personalized advice on how foreclosure impacts your credit and recommend realistic strategies to rebuild it afterward. By representing your interests, they often secure better outcomes than you might achieve alone.

Other Financial Implications of Foreclosure

Beyond the direct impact on your credit score, foreclosure can affect other areas of your financial health. For instance, it can influence your eligibility for future mortgages or loans, which may require higher deposits or carry higher interest rates.

It can also affect insurance premiums or employment opportunities where credit history is reviewed. Being aware of these wider consequences helps you understand the full scope of foreclosure’s impact.

Furthermore, foreclosure can create emotional strain and uncertainty. Seeking support early from trusted professionals in Farmington Hills, MI, can ease this burden and help you regain control of your finances.

A Realistic Roadmap to Rebuilding Credit After Foreclosure

Rebuilding credit after foreclosure is a gradual process that requires dedication. This article provides a practical six-step roadmap to help you regain financial health:

1. Obtain and Review Your Credit Reports
Get your reports from Experian, TransUnion, and Equifax. Look for foreclosure entries and any errors. Dispute inaccuracies to ensure your record is accurate.

2. Create a Budget and Manage Expenses
Prioritize paying bills on time and controlling spending. Consistency in payments is key to improving your credit.

3. Establish Positive New Credit Accounts
Consider using secured credit cards or small personal loans. Make all payments promptly to build a positive history.

4. Monitor Your Credit Progress Regularly
Use credit monitoring tools to track your score changes and respond quickly to any issues.

5. Avoid Taking on New Unnecessary Debt
Focus on paying down existing debts before applying for new credit lines.

6. Seek Professional Credit Counseling if Needed
Counselors can provide tailored plans and guidance throughout your rebuilding journey.

Credit rehabilitation may take several years, but with persistent effort, your credit profile will steadily improve.

Why Foreclosure Help Is Essential for Farmington Hill, MI Residents

For those in Farmington Hill, MI, professional foreclosure help is vital to navigating these complex issues. Foreclosure affects not just your home but your financial foundation, so having knowledgeable assistance is critical.

Charles J Schneider PC offers experienced foreclosure help designed to protect your rights and help limit credit damage. Their attorneys work directly with lenders to negotiate solutions that fit your unique situation. This local, trusted support can be a game-changer in facing foreclosure challenges.

Obtaining foreclosure help early improves your chance to influence the outcome positively and helps you begin rebuilding your financial future sooner.

Take Control of Your Financial Future Today

If you are currently facing foreclosure or want to learn how to rebuild your credit afterward, Charles J Schneider PC offers trusted foreclosure help in Farmington Hill, MI. Their experienced attorneys provide personalized advice and aggressive representation designed to protect your credit and legal rights.

Call 734-591-4890 today or visit their contact page to schedule a consultation. Taking this first step can help you reduce the impact of foreclosure and build a stronger financial future.

Step-by-Step Guide to Bankruptcy Law and the Filing Process

Thu, 26 Mar 2026 12:49:23 GMT

Understanding bankruptcy law can feel overwhelming, especially if you are uncertain about the process and what is required at each step. At Charles J. Schneider, PC, we aim to clarify the bankruptcy filing journey for anyone considering debt relief in Detroit, MI. With our extensive experience serving the metro Detroit area, we know how vital it is for clients to have a clear roadmap at the outset. If you are ready for a fresh financial start, discover what the bankruptcy process involves from first consultation to discharge.

The Bankruptcy Filing Process: Experience-Based Overview

When you reach out to a qualified bankruptcy attorney, the path ahead may seem unclear. At Charles J. Schneider, PC, our role is to chart the course for you, making sure each phase is straightforward. The bankruptcy law process unfolds in several well-defined stages, and we’re here to walk with you through each one.

Initial Consultation and Case Evaluation

Our partnership begins with a meeting to assess your financial situation. During the consultation, we review your debt, assets, income, and expenses. This stage is where you’ll determine, with our guidance, which chapter of bankruptcy law best fits your needs, most commonly Chapter 7 or Chapter 13. The evaluation also prepares you for what supporting documents you need to gather and what you can expect in terms of timing.

Gathering Required Bankruptcy Documents

Accurate documentation is a cornerstone of a successful bankruptcy filing. Here is what you should prepare:

Recent pay stubs and proof of income
Tax returns for the past two years
Statements for all checking and savings accounts
Mortgage and vehicle loan documents
List of monthly living expenses and debts
Any legal actions or lawsuits filed against you

We ensure all your materials meet court requirements, so there are no surprises down the road. For an overview of how our team supports clients with documentation throughout the bankruptcy law process, visit our bankruptcy attorney services page.

Completing the Bankruptcy Petition

Once all your information is assembled, we prepare the official bankruptcy petition and schedules. Accuracy is essential. The court will scrutinize your statements of current income, assets, liabilities, contracts, and recent financial history. You’ll review and sign these documents before we file them electronically with the bankruptcy court in Detroit, MI.

Mandatory Credit Counseling

Bankruptcy law requires completion of a court-approved credit counseling course before you can file. This can often be done online in a matter of hours. The certificate you receive is filed with your petition, verifying your eligibility to proceed.

Automatic Stay: Legal Protection Begins

After your bankruptcy filing, the court issues an “automatic stay.” This is a powerful legal protection that temporarily halts most creditor actions against you, including lawsuits, foreclosures, and wage garnishments. You will attend a court-supervised meeting known as the 341 meeting or meeting of creditors, where your creditors can ask questions and a trustee will review your case.

What to Expect at the 341 Meeting

The 341 meeting is usually straightforward and brief. A bankruptcy trustee asks questions about your paperwork. Our team attends this hearing with you and prepares you for what to expect. Creditors rarely attend, but if they do, we are ready to address their questions or concerns relating to your bankruptcy filing.

Case Timeline and Discharge

If you file for Chapter 7, the process normally takes about four to six months from filing to discharge. In Chapter 13, you will enter a repayment plan spanning three to five years. Throughout, we update you on your case status and ensure all required steps are completed. "Discharge" means you are legally released from most debts included in the bankruptcy, granting you a fresh start.

Key Points to Remember: Setting Realistic Expectations

Our experience shows that preparation is vital to your success. Timing can vary depending on the complexity of your financial situation and the court’s current backlog. We always emphasize proactive communication so you are never left guessing the status of your case or next steps. Bankruptcy law helps protect your rights, but it works best when you understand the timeline and follow each requirement closely.

Life After Bankruptcy: Next Steps

Discharging debts is not the final chapter. At Charles J. Schneider, PC, our support continues as you rebuild your financial foundation. We provide information on credit repair, budgeting, and how to maximize your new financial start. If an appeal becomes necessary or a dispute arises, explore our bankruptcy appeal services for additional support.

Ready to Begin Your Bankruptcy Filing? Contact Us Today

If you are considering bankruptcy but want clarity about the process and local support you can trust, we are ready to help. Providing services in Detroit, MI, Charles J. Schneider, PC, stands with you at every step, from your first question to your discharge and beyond. To discuss your options and set a plan in motion, call us at 734-591-4890 or visit our contact page . Let’s start your new financial chapter together.

When Should You Consider Hiring Bankruptcy Attorney Services

Fri, 09 Jan 2026 07:30:36 GMT

Financial storms can hit anyone, and when they do, the pressure can feel unbearable. For many residents of Detroit, MI, dealing with overwhelming debt is a daily reality that impacts every aspect of life. If you find yourself constantly stressed about bills, dodging collector calls, and seeing no clear path forward, it may be time to seek professional guidance. Understanding when to seek help is the first step toward reclaiming your financial freedom. Engaging with a firm like Charles J Schneider PC for a consultation can provide the clarity you need. This article will explore the critical signs that indicate you should consider hiring bankruptcy attorney services in Detroit, MI , to navigate your financial challenges and work towards a new beginning.

Key Signs You Need Bankruptcy Attorney Services in Detroit, MI

Identifying the right moment to seek legal help is crucial. While every financial situation is unique, several common red flags suggest that professional intervention is necessary.

Ignoring these signs can often lead to more severe consequences, making early action incredibly important:

Overwhelming, Inescapable Debt: When your minimum monthly debt payments exceed what you can reasonably afford, and you see no way to pay down the principal balances, your debt has likely become unmanageable. This is often accompanied by relying on credit cards for necessities because your income is already spoken for.
Aggressive Collection Actions and Lawsuits: Persistent calls from collection agencies are stressful, but receiving a lawsuit for a debt is a serious escalation. A judgment against you can lead to wage garnishments or liens on your property. At this stage, consulting with a bankruptcy attorney services in Detroit, MI can help you understand how filing can trigger an "automatic stay," which immediately halts most collection activities, including lawsuits and garnishments.
Wage Garnishment or Bank Levies: If a creditor has successfully obtained a court order to garnish your wages or freeze your bank account, your financial stability is directly under attack. This direct impact on your take-home pay and access to savings creates an urgent need for a legal solution to stop the financial bleeding and protect your essential assets.
Using Retirement Funds to Pay Debts: Dipping into your 401(k) or IRA to cover credit card bills is often a financially damaging decision. These funds are typically protected in bankruptcy, and liquidating them can incur heavy taxes and penalties, jeopardizing your future security for a temporary fix. It's a clear signal that your current strategy is unsustainable.

A bankruptcy law attorney in Detroit, MI , can objectively evaluate your circumstances and advise if bankruptcy is a suitable path, ensuring you make informed decisions based on your long-term well-being.

Gaining Clarity and Understanding Your Legal Options

The world of bankruptcy law is complex, filled with specific chapters, rules, and paperwork that can be daunting for a layperson. One of the most significant benefits of hiring a bankruptcy attorney services in Detroit, MI is the clarity they provide. They will sit down with you, review your entire financial picture—including assets, debts, income, and expenses—and explain your options in plain language. Whether you're a candidate for Chapter 7 liquidation or a Chapter 13 repayment plan, your attorney will outline the pros, cons, and long-term implications of each. This professional guidance demystifies the process and empowers you to make a confident choice about your financial future. Proper bankruptcy preparations are essential for a successful outcome, and your lawyer will be your guide every step of the way.

The Critical Benefits of Professional Bankruptcy Attorney Services in Detroit, MI

Attempting to file for bankruptcy without an attorney, known as filing pro se, is extremely risky and can lead to costly mistakes. The court system operates on strict procedures and deadlines. Missing a form, filing incorrectly, or misunderstanding an exemption can result in your case being dismissed, leaving you without debt relief and having wasted the filing fees. As noted by financial resource Investopedia, understanding the process is critical before proceeding. Seasoned bankruptcy attorney services in Detroit, MI, provide invaluable protection against these pitfalls. They handle all the complex paperwork, represent you in court hearings, and negotiate with creditors on your behalf. Their expertise ensures that you maximize the protections available under the law, such as safeguarding your home, car, and retirement accounts through proper exemptions. This comprehensive support transforms a stressful, confusing ordeal into a managed, orderly process.

Contact Us for Skilled Bankruptcy Attorney Services in Detroit, MI

The value of experienced bankruptcy attorney services in Detroit, MI, cannot be overstated when navigating the federal legal system. From the initial consultation to the final discharge of your debts, having a dedicated advocate ensures that your rights are protected and your case is presented effectively. For those concerned about the outcome of a past filing, it's important to know that options exist. If you believe an error was made in your bankruptcy case, exploring bankruptcy appeal services is a critical next step to seek a fair resolution.

Don't let debt control your life. If any of the signs discussed here resonate with you, it is time to take action. The team at Charles J Schneider PC is here to provide the professional guidance and compassionate support you need to move forward. Contact us today for a confidential consultation and learn how our bankruptcy attorney services in Detroit, MI can help you achieve the fresh start you deserve.

How Bankruptcy Attorney Protects Homes in Livonia, MI

Thu, 08 Jan 2026 16:21:23 GMT

Financial stress can quickly place a home at risk. Missed payments, growing debt, and legal notices often lead homeowners to fear losing everything they worked for. A bankruptcy attorney can help explain legal options and slow the process before it becomes overwhelming. Many people do not realize how early guidance can protect their rights. Contact us today at 734-591-4890 to speak with Charles J. Schneider PC, serving the Livonia, MI area.

Understanding Foreclosure and Bankruptcy

When mortgage payments fall behind, lenders may begin the foreclosure process. This legal action allows a lender to recover the property if the loan remains unpaid. Once started, timelines can move quickly and leave homeowners unsure of what to do next.

Bankruptcy is a federal legal process designed to help people regain control of their finances. It can stop collection efforts and provide breathing room. A bankruptcy attorney helps explain how these protections may apply to your situation.

Many homeowners believe foreclosure cannot be stopped once it begins. In reality, there are legal tools that may help delay or even prevent it when used correctly.

How Bankruptcy Can Impact Foreclosure

Filing for bankruptcy triggers an automatic stay. This court order immediately pauses most collection activity. That pause often includes foreclosure proceedings, giving homeowners valuable time to act.

A bankruptcy attorney reviews income, debts, and goals before recommending a filing option. Each case is different, and the right approach matters. Timing also plays a key role in protecting a home.

Chapter 7 And Home Risk

Chapter 7 focuses on clearing unsecured debt. While it may not remove a mortgage, it can delay foreclosure long enough to explore other solutions. This pause often reduces immediate pressure.

Chapter 13 And Payment Plans

Chapter 13 allows homeowners to create a repayment plan over several years. This option may help catch up on missed mortgage payments. It is often used to stop foreclosure while maintaining ownership.

Why Legal Guidance Matters

The bankruptcy process involves deadlines and court filings. Mistakes can reduce protections or speed up foreclosure. A bankruptcy attorney helps ensure documents are accurate and filed correctly.

Legal guidance also helps homeowners understand their rights. Many protections exist under federal law, but they are not automatic without action. Having clear information builds confidence during stressful times. Charles J Schneider PC focuses on guiding clients through difficult financial moments. Their approach emphasizes clarity and long-term planning rather than rushed decisions.

How a Bankruptcy Attorney Supports Homeowners

Facing foreclosure can feel isolating. Legal support provides structure and direction when emotions run high. A bankruptcy attorney helps manage the process from start to finish.

Reviewing Financial Information

Income, debts, and assets are reviewed carefully. This review helps identify realistic solutions. It also determines which filing option may offer the strongest protection.

Communicating With Creditors

Lenders and collection agencies can be aggressive. A bankruptcy attorney can manage communication and reduce direct pressure on homeowners. This often brings relief early in the process.

Filing and Court Representation

Court filings must meet strict standards. Errors can delay relief or limit options. Legal oversight helps protect homeowners during foreclosure-related proceedings.

Planning for Financial Stability

Protecting a home is only one goal. A bankruptcy attorney also helps clients plan for the future. This includes budgeting guidance and rebuilding financial confidence.

Protecting Your Future After Foreclosure Threats

Financial hardship affects more than housing. Credit scores, savings, and peace of mind may suffer. Bankruptcy laws are designed to limit long-term damage.

A bankruptcy attorney explains what recovery may look like after filing. Many homeowners begin rebuilding sooner than expected. Understanding this process helps reduce fear and uncertainty. Charles J Schneider PC provides services in the Livonia, MI area. Our experience allows clients to move forward with realistic expectations and clear options.

When to Seek Help

Waiting too long can limit available protections. Early consultation often provides more flexibility. Even if foreclosure has already started, options may still exist.

Homeowners experiencing financial strain should seek guidance as soon as possible. Taking action early may prevent further damage. Delays often increase stress and risk. To learn more about legal options check our foreclosure services .

Homeowners often feel pressure to make quick decisions when financial notices arrive. Rushed choices can limit available protections and increase stress. Taking time to understand legal options can create space to breathe and plan. Early awareness often leads to better outcomes and fewer long-term consequences.

Choosing Trusted Legal Support

Selecting legal help is an important decision. Clear communication and realistic guidance matter. Homeowners deserve to understand every step of the process. Charles J Schneider PC is committed to helping individuals protect what matters most. Serving Livonia, MI, our focus is on stability and informed decision-making. Financial setbacks do not have to define the future.

If you are facing foreclosure concerns or growing debt, now is the time to act. Call us at 734-591-4890 to speak with a bankruptcy attorney serving Livonia, MI, or send us a message to get started today.

Bankruptcy Attorney in Detroit, MI: Debt Discharge Explained

Tue, 30 Sep 2025 04:20:27 GMT

Filing for bankruptcy is often the last option for people struggling with overwhelming debt. One of the biggest questions is which debts can actually be discharged. Working with an experienced bankruptcy attorney ensures you get clear answers and avoid costly mistakes. Contact us today at 734-591-4890 o schedule a consultation and learn how our team can help you in Detroit, MI.

A bankruptcy attorney reviews your financial situation, identifies debts that may qualify for discharge, and helps you understand exceptions. They also guide you through preparation, hearings, and appeals so that your rights are fully protected. With professional support, you can approach the process with confidence.

The Role of a Bankruptcy Attorney

The bankruptcy process can feel complicated, especially when you are unsure what qualifies for discharge. A bankruptcy attorney in Detroit, MI, does far more than complete forms. They provide legal advice, explain your rights, and represent you in court.

Some of the key roles include

• Reviewing financial records and categorizing debts

• Identifying dischargeable and non-dischargeable debts

• Preparing and filing required documents with the court

• Representing you in hearings and appeals

• Negotiating with creditors when needed

A bankruptcy law attorney ensures your case follows every legal requirement. Without guidance, it is easy to miss details that could prevent certain debts from being eliminated.

What Debts Can Be Discharged

Many unsecured debts can be discharged under bankruptcy. A bankruptcy attorney helps ensure these debts are included properly in your filing.

Common Dischargeable Debts

• Credit card balances

• Medical bills

• Personal loans

• Certain utility bills

• Older income tax debts (with specific conditions)

Having these debts discharged can provide a fresh financial start. A bankruptcy law attorney reviews your circumstances and argues for the inclusion of as many qualifying debts as possible.

Non-Dischargeable Debts

While bankruptcy provides relief, some debts cannot be erased. Your bankruptcy attorney explains these limits so you know what to expect.

Examples of Non-Dischargeable Debts

• Child support and alimony

• Most student loans

• Recent tax debts

• Court fines or criminal restitution

• Debts from fraud or misrepresentation

Even though these debts are not discharged, an experienced bankruptcy attorney in Detroit, MI, may suggest repayment strategies or restructuring options to make them more manageable.

Rules and Exceptions in Bankruptcy

Not all cases are straightforward. Bankruptcy law has exceptions, and understanding them is vital. A bankruptcy attorney helps you navigate these rules and avoid issues that could complicate your case.

Fraudulent Debts

Debts obtained by fraud are rarely discharged. A bankruptcy law attorney helps present accurate documentation to avoid any suspicion of fraud.

Recent Debts or Cash Advances

Large purchases or cash advances shortly before filing may be challenged by creditors. Your attorney can argue your case if the spending was necessary or reasonable.

Secured Debts

Debts tied to property, like car loans or mortgages, are treated differently. A bankruptcy attorney explains that while you may erase the debt, you could still lose the asset if payments are not made.

By reviewing these exceptions in detail, your bankruptcy attorney helps you build realistic expectations.

How Attorneys Document and Argue Eligibility

Documentation is key in bankruptcy. Courts require detailed financial records, and mistakes can delay or even harm your case. A bankruptcy law attorney assists by gathering and presenting evidence.

Key documents often include

• Tax returns

• Pay stubs and income records

• Loan contracts and credit card statements

• Proof of necessary expenses

• Bank account records

Your bankruptcy attorney in Detroit, MI, then argues your eligibility for discharge in court. They present evidence, respond to objections, and ensure your rights are respected throughout the process.

Preparing for Bankruptcy With Attorney Guidance

Preparation helps make the process smoother. Charles J Schneider PC offers resources and personal guidance to help you start on the right path.

Bankruptcy FAQ

Our bankruptcy FAQ answers common questions about timelines, documents, and court expectations.

Bankruptcy Preparations

Our bankruptcy preparations guide helps you gather documents and plan ahead before filing.

Bankruptcy Litigation and Appeals

If disputes arise, our bankruptcy litigation and appeals services provide strong courtroom representation.

By using these resources along with direct attorney support, you can feel prepared every step of the way.

Why Work With Charles J. Schneider, P.C.?

Choosing the right attorney can make a significant difference in your outcome. At Charles J Schneider PC, we focus on providing clear guidance and strong representation to clients in Detroit, MI.

Our bankruptcy attorneys combine decades of experience with compassion. We understand how stressful financial struggles can be and work hard to deliver peace of mind. From filing paperwork to defending your rights in appeals, our team ensures you are supported from start to finish.

Final Thoughts

Bankruptcy can open the door to a fresh financial future, but not every debt can be discharged. With the help of a skilled bankruptcy attorney in Detroit, MI, you can better understand which debts qualify, how to present your case, and what exceptions may apply.

If you feel overwhelmed by debt, now is the time to act. Call us at 734-591-4890 today to speak with a bankruptcy law attorney or send us a message to get started with Charles J Schneider PC in Detroit, MI.

How a Chapter 7 Bankruptcy Lawyer in Detroit, MI Guides You

Mon, 14 Jul 2025 22:16:26 GMT

Filing for bankruptcy may feel like an end, but it’s the beginning of a new chapter. If you’ve recently completed your case, understanding what comes next is just as crucial as the filing process itself. With guidance from a chapter 7 bankruptcy lawyer in Detroit, MI , you can confidently take steps toward rebuilding your financial future. After your debts are discharged, it’s time to turn your focus to recovery. Whether you’ve faced overwhelming credit card bills, medical debt, or job loss, Chapter 7 bankruptcy gives you the opportunity to reset. But knowing how to take advantage of this opportunity is key. In Detroit, MI, many residents are turning to Charles J Schneider PC for help navigating post-bankruptcy life. Let’s look at what to expect after a discharge and how to move forward with smarter financial habits and better credit.

What Happens After Debt is Discharged?

A successful Chapter 7 case typically results in the discharge of most unsecured debts. That means you are no longer legally responsible for paying off obligations like credit card balances, payday loans, or personal loans. This clean slate can be liberating, but it’s also a pivotal moment. Once your case is complete, you’ll receive a discharge order from the court. This document confirms that qualifying debts have been wiped clean. However, certain obligations such as student loans, recent taxes, and domestic support payments remain.

To make sure you understand the specifics of your discharge, speak with a chapter 7 bankruptcy lawyer in Detroit, MI. They can review your case and help ensure that all debts are properly addressed. You can also find detailed information and resources on our bankruptcy FAQ page .

Rebuilding Credit After Bankruptcy

One of the biggest concerns people have after filing is how to repair their credit. It’s true that Chapter 7 remains on your credit report for up to 10 years, but that doesn’t mean your score can’t improve much sooner.

Here are essential steps to rebuild credit after your bankruptcy:

Monitor Your Credit Reports
Start by reviewing your credit reports from Experian, Equifax, and TransUnion. Make sure discharged debts are marked appropriately. Errors should be disputed right away.
Apply for a Secured Credit Card
These cards require a deposit and are easier to obtain after bankruptcy. Use it sparingly, keep balances low, and always pay on time.
Make On-Time Payments
Going forward, payment history is everything. Even one missed bill can slow your recovery. Set up reminders or automatic payments to avoid mistakes.
Consider a Credit-Builder Loan
Offered by many credit unions, these loans let you build a savings balance while making affordable monthly payments. They’re a low-risk way to prove creditworthiness again.

A chapter 7 bankruptcy lawyer in Detroit, MI can help you develop a recovery plan that includes rebuilding your credit in a safe and strategic way. You can also visit our bankruptcy preparation and getting started guide for more recovery tips.

Tips for Avoiding Future Financial Trouble

Post-bankruptcy life is all about avoiding the mistakes or circumstances that led to filing in the first place. With help from a bankruptcy lawyer in Detroit, MI, you can build a stronger financial foundation and avoid needing legal debt relief again.

Here are smart habits to develop:

Build a Realistic Budget
Track your income and expenses every month. Identify areas to cut spending and make sure your financial plan aligns with your goals.
Start an Emergency Fund
Even a few hundred dollars saved can help avoid future debt. Aim to build up at least $1,000 for unexpected expenses like car repairs or medical costs.
Limit Credit Applications
Don’t rush to rebuild credit by applying for multiple cards or loans. Focus on quality rather than quantity.
Seek Financial Education
From community workshops to online courses, learning about money management can keep you on the right track.

Working with a chapter 7 bankruptcy lawyer in Detroit, MI also helps keep you accountable. Ongoing legal support can serve as a financial checkpoint during your rebuilding journey.

The Detroit, MI Community and Your Recovery

Living in Detroit, MI, you’re part of a resilient community that understands financial hardship. Whether you’ve lost a job, gone through a divorce, or dealt with medical bills, bankruptcy doesn’t define your future, it resets it. At Charles J Schneider PC, we know that filing is only the first step. That’s why we work closely with each client to offer ongoing guidance even after the case is closed. As a trusted bankruptcy lawyer in Detroit, MI, our role doesn’t end at discharge. We're here to help you succeed financially for the long term.

Explore our chapter 7 bankruptcy resources to better understand how we can support you after filing. If you want to move forward with a clear path and steady progress, now is the time to meet with a chapter 7 bankruptcy lawyer in Detroit, MI who understands the local laws and the unique economic landscape of Detroit.

Contact a Chapter 7 Bankruptcy Lawyer in Detroit, MI, Your Fresh Start Begins Today

At Charles J Schneider PC, we believe every person deserves a second chance. Whether you’re just starting the process or have recently completed your case, our team is here to guide you. With a conveniently located Detroit office, we offer compassionate, practical support for individuals ready to rebuild. A knowledgeable chapter 7 bankruptcy lawyer in Detroit, MI can help you stay on track, rebuild credit, and avoid future debt. Contact us today to schedule your confidential consultation and take the first step toward a stronger financial future.

Why Choose a Local Bankruptcy Law Attorney Detroit, MI?

Fri, 06 Jun 2025 12:59:28 GMT

When facing serious financial challenges, choosing the right bankruptcy law attorney in Detroit, MI can make all the difference. A local bankruptcy attorney understands Michigan laws, court procedures, and what it takes to guide you through the process efficiently and with care.

Whether you're struggling with mounting credit card debt, wage garnishments, or foreclosure threats, having a knowledgeable attorney by your side who’s deeply rooted in the Detroit community offers more than legal guidance, it gives you peace of mind.

Why Local Insight Matters: Work With a Bankruptcy Law Attorney in Detroit, MI

One of the most important benefits of hiring a bankruptcy law attorney in Detroit, MI is their familiarity with local bankruptcy courts, trustees, and judges. Every court has its own rules and preferences. A reliable Detroit attorney knows how to navigate these efficiently, avoiding delays and common mistakes that out-of-town attorneys might make.

At Charles J Schneider PC, we've helped thousands of Detroit residents file for bankruptcy successfully. Our deep knowledge of the local legal landscape allows us to tailor each case to meet court expectations and get you the fresh start you deserve.

Personalized Service from a Bankruptcy Law Attorney in Detroit, MI

Unlike large, impersonal firms, a local bankruptcy law attorney in Detroit, MI can provide the one-on-one support you need during such a stressful time. At Charles J Schneider PC, we know that every financial situation is different. That’s why we take the time to listen to your concerns, explain your options clearly, and walk you through every step of the bankruptcy process.

Our clients appreciate our responsiveness and ability to offer immediate guidance, something that’s not always possible when working with firms located outside the area.

Community-Focused Advocacy from a Bankruptcy Law Attorney in Detroit, MI

Choosing a local Bankruptcy Attorney isn’t just about convenience, it’s about trust. At Charles J Schneider PC, we’ve proudly served Detroit and surrounding communities for decades. We’re not just your legal advocates; we’re your neighbours. Our reputation has been built on integrity, professionalism, and proven results.

Schedule a Free Appointment with a Trusted Bankruptcy Law Attorney in Detroit, MI

Ready to take control of your financial future? Don’t wait. Contact one of our knowledgeable and trusted bankruptcy law attorneys in Detroit, MI who understands your needs and fights for your best outcome.

At Charles J Schneider PC, we offer Bankruptcy Appeal Services and personalized legal support designed to help you overcome debt and reclaim your life. Call us today at (734) 591-4890 to schedule your free appointment. We're here to help you make a fresh start, right here in Detroit, MI.

Struggling Financially in Detroit? How a Bankruptcy Lawyer Can Help

Tue, 25 Mar 2025 21:17:15 GMT

Facing financial struggles can be overwhelming, especially in a challenging economy like that of Detroit. If you find yourself in debt, feeling helpless, or overwhelmed by bills, it's important to know that there are solutions available. Bankruptcy attorney services in Detroit, MI, offer a lifeline to those in need of financial relief. A knowledgeable bankruptcy law attorney in Detroit, MI can guide you through the complex process of filing for bankruptcy, helping you regain control of your finances and get a fresh start.

Why Hire a Bankruptcy Attorney in Detroit, MI?

Detroit has faced economic challenges, and if you're struggling with debt, a bankruptcy attorney can help. Filing for bankruptcy can reduce or eliminate debt, allowing you to rebuild your finances. A skilled bankruptcy attorney in Detroit offers tailored legal advice for both personal and business financial issues.

The Role of a Bankruptcy Law Attorney in Detroit, MI

A bankruptcy law attorney in Detroit, MI, offers more than just legal advice. They will:

Evaluate your financial situation:

A skilled attorney will assess your debt, assets, and income to determine the best course of action for your specific case. Whether you're considering Chapter 7, Chapter 11, or Chapter 13 bankruptcy, they'll help you understand your options.

Guide you through the bankruptcy process:

Bankruptcy filings involve complex paperwork and legal procedures. Your attorney will ensure that all the necessary documents are filed correctly, avoiding costly mistakes.

Protect your assets:

Bankruptcy can help safeguard valuable assets like your home or car. A bankruptcy attorney in Detroit, MI, will fight to protect what matters most.

Represent you in court:

If your bankruptcy case requires a hearing, your attorney will represent you, making sure you present your case effectively and advocating for the best possible outcome.

When to Contact a Bankruptcy Lawyer in Detroit, MI

If you're considering bankruptcy, it's crucial to consult an attorney early. Don’t wait until debts become critical. Contact a lawyer if:

You can’t pay bills or are regularly behind on payments.
You’re facing collection calls, foreclosure, or repossession.
You’re overwhelmed by credit card or medical debt.
You’re unsure which bankruptcy type suits you.

A bankruptcy lawyer from Charles J Schneider PC can help you understand your options and protect your financial future.

How Charles J Schneider PC Can Help

At Charles J Schneider PC, we specialize in bankruptcy attorney services in Detroit, MI. Our team of experienced bankruptcy law attorneys in Detroit, MI is dedicated to providing compassionate and knowledgeable assistance during your time of financial difficulty. We understand how tough it can be to navigate debt, and we are here to guide you through every step of the bankruptcy process.

If you're ready to take control of your financial future, we are here to help. Don’t let debt control your life. Contact us today at Charles J Schneider PC and begin your journey toward financial freedom.

Bankruptcy could be the first step toward regaining your financial independence. Contact Charles J. Schneider, PC to schedule a free consultation. Our team is here to guide you through the complexities of bankruptcy and help you achieve a fresh financial start. Let’s work together to build a better tomorrow.

By reaching out to Charles J Schneider PC, you’ll be taking the first step towards resolving your financial struggles and getting back on track. Let us provide the expert guidance you need to make informed decisions and secure a brighter financial future.

Guide to Bankruptcy Lawyer in Ypsilanti, MI

Sat, 01 Feb 2025 08:48:36 GMT

Facing financial difficulties can feel like an uphill battle, but relief is within reach. A bankruptcy lawyer in Ypsilanti, MI , can provide the professional guidance you need to navigate the bankruptcy process and achieve a fresh financial start. Whether it’s mounting credit card bills, unexpected medical expenses, or mortgage arrears, taking this critical step can help you regain control of your finances.

Understanding Chapter 7 and Chapter 13 Bankruptcy

Residents of Ypsilanti generally turn to one of two bankruptcy options: Chapter 7 or Chapter 13.

Chapter 7 Bankruptcy: Ideal for those with limited income and substantial unsecured debt (like credit cards or medical bills), Chapter 7 involves liquidating non-exempt assets to repay creditors. Thanks to Michigan's exemptions, many individuals can keep their primary assets, including homes and vehicles.
Chapter 13 Bankruptcy: This option is perfect for those with a steady income who want to retain their property. Chapter 13 allows you to restructure your debts into an affordable repayment plan over three to five years.

A skilled bankruptcy attorney in Ypsilanti, MI , can assess your financial situation and determine which option aligns with your goals.

The Role of a Bankruptcy Lawyer in Ypsilanti, MI

Filing for bankruptcy involves detailed paperwork, deadlines, and legal procedures. Even a small error can compromise your case. A professional bankruptcy lawyer in Ypsilanti, MI, can:

Assess Your Financial Situation: They’ll help you determine if bankruptcy is the best option or suggest alternative debt-relief solutions.
Guide You Through the Process: From gathering documents to representing, you in court, your lawyer ensures every step is completed properly.
Maximize Asset Protection: Y our attorney will help you take full advantage of Michigan’s exemptions to protect essential property.
Stop Creditor Harassment: Filing for bankruptcy triggers an automatic stay, which halts collection calls, wage garnishments, and lawsuits.

Why Choose a Local Bankruptcy Lawyer in Ypsilanti, MI?

Working with a local attorney ensures they’re well-versed in Michigan bankruptcy laws and local court practices. A bankruptcy lawyer in Ypsilanti, MI, understands the specific challenges faced by Ypsilanti residents and can tailor their approach to suit your unique circumstances. Their expertise can make the difference between a smooth process and unnecessary complications.

If you’re struggling with debt and fear losing your assets, it’s time to take control of your financial future. Contact Charles J Schneider PC for expert bankruptcy lawyer in Ypsilanti, MI. Their experienced team can help you navigate this challenging time with confidence and clarity, offering personalized solutions to protect your home, car, and other essential assets. Don’t wait—take the first step towards financial freedom today!

The Role of a Bankruptcy Law Attorney in Protecting Your Assets in Detroit MI

Thu, 09 Jan 2025 14:56:37 GMT

Financial struggles can be overwhelming, but bankruptcy attorney services in Detroit, MI, can provide a lifeline when it comes to securing your assets and regaining financial stability. Whether you’re facing foreclosure, vehicle repossession, or mounting debts, understanding how skilled attorneys can help safeguard your essential belongings is crucial during financial difficulties.

How Bankruptcy Law Attorneys Protect Your Assets

Filing for bankruptcy doesn’t have to mean losing everything you’ve worked hard for. A bankruptcy law attorney in Detroit, MI , plays a vital role in helping individuals and families navigate the complex legal system while ensuring that their most important assets—like their home, car, and savings—are protected.

One of the primary ways attorneys achieve this is by determining the right type of bankruptcy to file. Chapter 7 and Chapter 13 bankruptcies offer distinct protections and benefits, and an experienced attorney can guide you toward the option that best suits your situation. For example, Chapter 13 allows you to reorganize debts and make manageable payments over time, often preventing foreclosure or repossession.

Skilled attorneys also leverage exemptions available under Michigan law to shield certain assets from liquidation. These exemptions might include your primary residence, household goods, and even retirement accounts.

The Importance of Local Expertise in Detroit, MI

Bankruptcy laws vary by state, making it essential to work with an attorney familiar with Michigan’s legal framework. A bankruptcy law attorney, will understand the specific exemptions and legal nuances relevant to residents, ensuring you get the best possible outcome

Moreover, a local attorney can handle negotiations with creditors, reducing harassment and stress while creating a more manageable repayment plan. They’ll also prepare and file all necessary paperwork accurately and on time, helping you avoid common pitfalls that could jeopardize your case.

For a comprehensive guide on when to declare bankruptcy, understanding your timing is just as important as choosing the right legal support.

Benefits of Professional Bankruptcy Services

The emotional and financial toll of debt can be overwhelming, but professional bankruptcy services provide peace of mind. Here’s how a seasoned bankruptcy attorney helps you:

Retaining ownership of your home and vehicle during bankruptcy proceedings.
Stopping wage garnishments and halting foreclosure actions.
Simplifying the process by explaining complex legal terms and handling all documentation.

If you’re struggling with debt and fear losing your assets, it’s time to take control of your financial future. Contact Charles J Schneider PC for expert guidance. Their experienced team can help you navigate this challenging time with confidence and clarity, offering personalized solutions to protect your home, car, and other essential assets. Don’t wait—take the first step towards financial freedom today!

Farm Bankruptcy: What You Should Know

Wed, 24 Jan 2024 23:18:21 GMT

Farming is a livelihood that requires significant investment, hard work, and patience. As much as farmers love their farms, it's no secret that many farm families in the country are experiencing financial difficulties. Factors contributing to the distress include low commodity prices, global trade tensions, and climate change. If you're a farmer facing financial struggles, you need to know how to deal with it, and one of the options is filing for bankruptcy. In this blog, we'll discuss everything you should know about farm bankruptcy to help you protect your farm and finances.

What is Farm Bankruptcy?

A farm bankruptcy is a legal process through which a farmer can reduce or eliminate debts under Chapters 12 or 7 of the Bankruptcy Code.

Chapter 12 Bankruptcy

Chapter 12, also known as the Family Farmer and Fisherman Bankruptcy, is a specialized bankruptcy option tailored to assist individuals in the agricultural sector. Its primary objective is to provide a framework for family farmers and fishermen to reorganize their financial affairs and retain ownership of their farms.

Through the implementation of a structured debt repayment plan, Chapter 12 allows individuals to gradually repay their debts over a period of three to five years. This unique approach ensures that repayment obligations align with the individual's income, providing a realistic and sustainable path toward financial stability while safeguarding the future of their farming operations.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as liquidation bankruptcy, provides individuals with the opportunity to eliminate a significant portion of their debts and embark on a fresh financial journey. Through this legal process, one can effectively erase most of their financial obligations, enabling a clean slate for a brighter future. Whether burdened by overwhelming debts or seeking a fresh start, Chapter 7 bankruptcy offers a pathway to financial freedom and a chance to rebuild one's life.

Reasons to File for Farm Bankruptcy

Filing for bankruptcy is a difficult decision for any farmer. However, when the debt grows beyond your capacity to repay, bankruptcy may be one option to protect your farm and finances. In a nutshell, there are three main reasons why farmers file for bankruptcy: to restructure debt, to stop foreclosures and collection activities, and to eliminate unmanageable debt. Bankruptcy may also give farmers the breathing space to recover from adverse situations such as crop damage, natural disasters, and health challenges.

How to File for Bankruptcy

Filing for a farm bankruptcy can be a complicated and emotional process. It's essential to work with an experienced bankruptcy attorney who understands the nuances of farm bankruptcy. Before filing for bankruptcy, you'll need your financial records and an honest assessment of your income and expenses. You'll also need to prepare a debt repayment plan (for Chapter 12) or a statement of assets and liabilities (for Chapter 7). After filing, the court will issue an automatic stay, a legal order that stops creditors from pursuing collection activities.

Effects of Bankruptcy on Your Farm and Credit Score

While bankruptcy is a legal and valid solution for farmers facing financial crises, it may have significant consequences on finances and farming operations. Your farm equity and assets may be sold to repay creditors under Chapter 7 or restructured under Chapter 12. Your credit score will also take a significant hit, which may affect your ability to borrow in the future. However, bankruptcy is not the end of your farming career. With meticulous planning and hard work, you can recover financially and rebuild your credit.

Farm bankruptcy is a legal process that can provide a fresh start and a chance to rebuild for farmers in a financial crisis. If you're considering bankruptcy, it's essential to understand the different types of bankruptcy, the reasons for filing, and the legal and financial implications. Consulting with a bankruptcy attorney is essential to navigate the complicated process. Remember, bankruptcy may have a long-lasting effect on your farm and finances, so weigh your options carefully. Keep in mind that bankruptcy is not an admission of failure but a courageous decision to take control of your financial future.

For more information about bankruptcy, contact us at Charles J Schneider PC.

A Bankruptcy Attorney Can Help You | Charles J Schneider PC

Wed, 17 Jan 2024 07:57:10 GMT

6 Ways Hiring a Bankruptcy Attorney Can Improve Your Life

If you are like most people, you might look at bankruptcy as a negative thing. That is actually not the case. When used correctly, bankruptcy can have a positive impact on your life. That is especially true if you work with a bankruptcy attorney.

If you are thinking about filing for bankruptcy, find six ways filing for bankruptcy can improve your life.

1. You Will Stop Being Harassed by Creditors

Creditors will use any tactic they can to get you to pay your outstanding debts. Unfortunately, some of those tactics can cross the line into harassment. Creditors may call your home at all hours of the day or night. Or, they may start calling your friends and family. Sometimes, the harassment involves making calls to your employers.

One of the benefits of hiring a bankruptcy attorney is that the harassment stops once you have an open bankruptcy case. Once your attorney files your bankruptcy case, your creditors have to stop contacting you altogether.

2. Your Emotional Well-Being Will Improve

If your mounting debt has you losing sleep, hire a bankruptcy attorney. Calls from creditors and collection letters can hurt your emotional and physical well-being. If that is happening to you, hiring a bankruptcy attorney can help you overcome the anxiety and depression.

3. Your Outstanding Debt Will Largely Dissolve

If your collection accounts are increasing, you may wonder how you will ever pay off all that debt. Even with payment arrangements, repaying your debt could take years. Plus, not all creditors will offer affordable repayment plans.

You will not need to worry about that when you hire a bankruptcy attorney. When you have your attorney file for Chapter 7 bankruptcy, much of your debt will be discharged, which means you will not owe on those. With Chapter 13, the courts will work to ensure that you get affordable payment plans for your outstanding debt. Your bankruptcy attorney can help you decide which bankruptcy option is best for you.

4. Your Wage Garnishments Will Stop

If creditors have garnished your bank accounts or wages, you may not have enough money left over to survive. If that has happened, hire a bankruptcy attorney. You might not know it, but when you file for bankruptcy, the garnishments stop. Creditors will no longer be able to take money from your bank accounts or attach your earnings.

5. You Likely Will Not Lose Your Home

If you have fallen behind on your house payments, do not wait until the bank takes it away. Even if you are facing foreclosure, filing for bankruptcy can help you save your house. Your bankruptcy attorney can often help you keep your home, even after filing for bankruptcy.

Bankruptcy can help restructure your loan so that your payments are more affordable. And, once the rest of your debt gets discharged, you will have the money you need to stay current on your house payments.

6. You Will Get a Fresh Start

If you are struggling to pay your bills, it can feel like there is no end in sight. That is not the case. Filing for bankruptcy lets you get a fresh start toward financial freedom. Once your bankruptcy gets discharged, you can start rebuilding your credit. A bankruptcy attorney can help you get the fresh start you need.

Do not let rising debt affect your life. Get the help you need by calling us today. At Charles J Schneider PC , our bankruptcy attorneys are dedicated to helping you get the debt relief you need. Let us know what questions or concerns you have. We will be happy to go over anything you want to know.

Small Business Bankruptcy: Strategizing With an Attorney

Wed, 15 Nov 2023 22:17:38 GMT

Running a small business can be a rollercoaster of challenges and triumphs. In the face of financial turmoil, hiring a bankruptcy attorney can be a crucial step toward saving your small enterprise. In this article, learn about the role of an attorney in guiding your business through troubled waters and helping you make informed decisions.

Assessing Your Financial Situation

A bankruptcy attorney specializes in understanding complex financial situations, and they can determine the financial health of your business. For example, an attorney can determine whether your business is capable of surviving or not, and then explore various options for improving the financial situation you are in. Trying to improve the situation without an attorney can cause further financial complications when there is a large sum of debts to pay.

Tailoring a Bankruptcy Strategy

Bankruptcy is not a one-size-fits-all solution, and an attorney can help you navigate the various types of bankruptcy. For instance, Chapter 7, Chapter 11, or Chapter 13 bankruptcy might best suit your business needs. An attorney will guide you through the complicated legal process and ensure that your interests are protected throughout the proceedings. A tailored strategy can make the difference between your small business recovering or closing down.

Restructuring Your Business Debts

Bankruptcy attorneys are skilled negotiators and can work with your creditors for better terms regarding your outstanding debts. This may involve debt restructuring, where the attorney helps you develop a repayment plan that is feasible for your business. By negotiating, you may be able to reduce the burden the debts have in your life and experience a more manageable path to recovery.

Protecting You from Harassment

Dealing with creditors can be overwhelming, especially when they resort to aggressive tactics like constant calls, threats, or legal actions. A bankruptcy attorney can shield you from such stress by acting as an intermediary between you and your creditors. An attorney will ensure that all communication is channeled through them, giving you the peace of mind to focus on rebuilding your business.

Protecting Your Business Assets

Preserving your business assets is paramount when facing bankruptcy. A bankruptcy attorney can help protect your business assets, such as equipment, inventory, and intellectual property from being liquidated to pay off creditors. They will employ legal strategies to safeguard what is essential for your business to recover, allowing you to emerge from bankruptcy with a stronger foundation.

Minimizing Personal Liability

As a small business owner, you may have personal liability for business debts. A bankruptcy attorney can help you navigate the complex boundaries between business and personal debts, which is important for shielding your personal assets from the reach of business creditors. Minimizing personal liability can secure your future apart from the financial situation of your business.

Doing Things the Legal Way

Bankruptcy proceedings involve complex legal requirements and paperwork. Filing for bankruptcy without legal representation can lead to costly mistakes and delays. A bankruptcy attorney ensures that all documentation and procedures are in compliance with the law. This not only expedites the process, but also prevents potential issues that could lead to your bankruptcy case being dismissed.

Planning Recovery After Bankruptcy

A bankruptcy attorney does not just assist during the bankruptcy process, but also plays a role in helping you plan for the post-bankruptcy phase. For example, an attorney can provide guidance on rebuilding your credit. They can also assist with implementing sound financial practices to ensure long-term business success.

Small business bankruptcy can be an emotional process, but it can also offer a chance for a fresh start. Understanding the types of bankruptcy, eligibility criteria, and the pros and cons of each option is crucial. Contact the legal experts at Charles J Schneider PC to plan your bankruptcy strategy in a way that maximizes the benefits and minimizes the drawbacks.

Want To Discharge Old Tax Debt in Bankruptcy? You Need a Long-Term Plan

Mon, 18 Sep 2023 14:36:22 GMT

Can You Eliminate Tax Debts in Bankruptcy?

Tue, 09 May 2023 20:32:10 GMT

Whether bankruptcy eliminates tax debt is a common question among people who want to declare bankruptcy. While some people think that all tax debt can be eliminated through bankruptcy, this cannot be further from the truth. Tax debt is treated differently from other debt once an individual files for bankruptcy. Learn more about tax debt as it relates to bankruptcy.

Discharging Tax Debt With Chapter 7 Bankruptcy

You may discharge tax debt with this type of bankruptcy if you fulfill the terms outlined below:

Your debt is state-income debt. Any other taxes, such as fraud penalties and payroll taxes, stay effective in the case of Chapter 7 bankruptcy. Therefore, you can only avoid regular income tax payments owed to the federal government or the state.
Your debt is three years old. You must have filed for bankruptcy at least three years after the original tax return was due.
Your case is not of willful evasion, and you did not commit fraud. Some people willfully try to evade tax or file fraudulent taxes. If, for example, you used a fake social security number, bankruptcy cannot save you from paying your debt.
Your case passes the 240-day rule. This means that the Internal Revenue Service (IRS) must not have assessed at all or must have assessed the debt at least 240 days before you file for bankruptcy. However, the time limit may be longer if the IRS had a public offer/compromise that suspended collection activity or if you have had another bankruptcy filing.
You filed a return. You should have filed a tax return at least two years prior to your bankruptcy filing. In many cases, filing a late return will mean the tax is not discharged, while in other cases, the courts may allow you to discharge the debt if you have met other criteria in the list but filed a late return.

Remember, different jurisdictions may have different requirements to fulfill. Additionally, in Chapter 7, using a credit card for non-dischargeable tax debt means that the balance will be a non-dischargeable debt should the creditor file a bankruptcy lawsuit.

Federal Tax Lien

Your taxes may qualify for discharge, but that does not mean that bankruptcy will wipe out any pre-existing tax liens. Chapter 7 wipes out your personal obligation to pay the taxes that qualify, so the IRS does not go after your wages and bank accounts. However, the lien remains if the IRS had put a lien on your property. If you need to sell your property, you must pay off the tax lien before the sale and transfer of the property title.

Discharging Tax Debt With Chapter 13 Bankruptcy

Managing debt with Chapter 13 bankruptcy is a smart move. The taxes may be forgivable depending on how much disposable income you have after deducting necessary expenses from your payment. Furthermore, the dischargeable taxes do not accrue additional penalties and interests. Chapter 13 bankruptcy allows you to pay what you owe to satisfy an IRS lien.

If you include all your outstanding tax, post-petition tax, and tax return obligations current during your Chapter 13 bankruptcy, IRS abides by the plan. Usually, any non-dischargeable tax will need to be paid within the three to five-year plan, so you can catch up on your taxes and debt when the period is over.

If you want to file for bankruptcy, you need a knowledgeable, experienced partner that understands your situation. Here at Charles J Schneider PC, we offer guidance to help you get out of difficult financial situations. We understand the law underlying the bankruptcy process to help you recover financially. Reach out today for a free consultation.

What You Need To Know About the Means Test

Thu, 16 Mar 2023 19:07:13 GMT

About the Means Test | Charles J Schneider, PC

Debtors who file for Chapter 7 bankruptcy must undergo the means test. While the test drafters intended to limit the number of people filing for Chapter 7 bankruptcy, most debtors who file for bankruptcy pass the test. This blog will discuss what you need to know about the Chapter 7 bankruptcy means test.

What Is the Means Test?

The means test is a way to determine if a person is eligible to get debt relief via Chapter 7 bankruptcy. The test considers your family size, expenses, and income to determine if you can't pay your debts. Your bankruptcy application won't go through if your income exceeds the set limit.

Only debtors with consumer debts can undertake the means test. For example, you can file for the means test if your debt is primarily from medical expenses or credit card debt. Military members, veterans, and those with business debts typically skip the means test.

How Does the Test Work?

The first step is to calculate your current monthly income, which is twice the gross income you earned during the last six months before filing for bankruptcy. You will then compare that income to the median income for your state. Each state has a median income that depends on the family size. If your income is lower than the state's median income, you are eligible for Chapter 7 bankruptcy.

If your income is higher, you may not be eligible. However, having a higher income than the state's median doesn't necessarily disqualify you as you can deduct some expenses from your income. You should find out your state’s allowed deductible expenses and subtract the amount from the current monthly income to get the disposable income. If your disposable income is still greater than the state median income, you are unlikely to qualify for Chapter 7 bankruptcy.

How Can You Calculate Your Household Income?

You can determine your gross monthly income by adding your wages, pension, alimony, child support, rental income, and other regular forms. You should find the total for the last six months and divide the number by six. Using six months instead of one month helps the bankruptcy court know your average monthly income. Remember, you shouldn't add your social security income to your gross monthly income.

What Documents Are Necessary for the Means Test?

People seeking to file for Chapter 7 bankruptcy must fill out various means test forms. The type of forms vary depending on your type of debt, but the following forms are very common:

A declaration of exemption from a presumption of abuse
A report about your means test calculation
A statement of your current monthly income

If your current monthly income is below your state's median income for your family size, you only have to file the statement of current monthly income. However, if your income is above it, you must also fill out the means test calculation form. The form calculates your performance and shows you the results.

The results must show a negative number or zero. The negative number proves that your disposable income is less than your debt.

Can You Be Excused From the Means Test?

You can take the means test if a huge chunk of your debt is consumer debt. If the other types of debt are greater than your consumer debt, then you don't have to take the means test.

Tort claims don't constitute consumer debts. Tort claims are payments you should make to another party for causing injury or damage to them without excuse. For example, if your negligence leads to an automobile accident, you may have to compensate any affected parties.

If you are unable to repay your debt, you can file for Chapter 7 bankruptcy to get help and avoid creditors. Charles J Schneider, PC, is a debt relief agency that helps people to file for bankruptcy. Contact us to get help.

The Role of the Trustee in Chapter 7 Bankruptcy

Thu, 22 Dec 2022 16:33:03 GMT

Individuals who file for Chapter 7 bankruptcy protection will receive help from a trustee to manage their estate. Thus, you will often interact with the trustee to handle your bankruptcy case, and they will settle all or most of your debt. Here is a complete overview of the role and responsibility of a trustee in a Chapter 7 bankruptcy claim.

Examine Your Bankruptcy Filing

A trustee must determine that the information you presented on your finances and creditors is legitimate. They will investigate your fund usage in the few months before you submit your documents. They will also ensure you list all the creditors regardless of your favoritism or preference to pay some and ignore others.

Finally, they will conduct an independent review of your assets to ensure you did not fraudulently hide or transfer ownership before filing.

Handle the Creditors

Once the trustee completes the review, they must determine how they will organize repayment with your creditors. They will call a meeting with the creditors to interview you and discuss the way forward on how they can receive their payment. Some creditors might skip this step if they feel you were completely honest with your filing. Others will show up to determine if everything you present in the documents is legitimate.

Thus, the trustee will be the central figure in the 341 creditors' meetings and interviews. The trustee will forward questions the creditors want answered and inquire more about your assets and financial history. If your responses match the investigation and bankruptcy documentation, the trustee can move to the next step in the procedure.

Check Liens

A court-appointed trustee will check any outstanding liens against the debtor in a Chapter 7 bankruptcy. A lien is a legal claim or right against a property, typically to satisfy a debt or other obligation. For example, you might offer your assets as collateral to receive a loan or debt and forfeit it if you cannot repay it.

Liens involve assets like real estate or personal property to secure a mortgage or equity lines of credit. It also includes other credit facilities like tax liens. The trustee will determine the priority of the liens and whether they can avoid them.

For instance, a mistaken signature or inaccurate information in a lien contract can forfeit a creditor's right to the asset, and the trustee can sell the asset for the benefit of the other creditors. The trustee will also work with the debtor's creditors to negotiate a repayment plan, if necessary.

Liquidate Your Assets

The trustee will work with you to recover and repossess all your non-exempt property. Non-exempt properties are all assets not protected by Chapter 7 bankruptcy. A trustee might search your home if they feel you hid some assets in the filing. Otherwise, they can cooperate with you in this process.

The trustee will then liquidate all your non-exempt property to repay investors. They can sell the property directly to recover funds or negotiate a buy-back plan with you at a discounted rate.

Recover Prebankruptcy Expenditures

A trustee will work to recover any payments made before you filed for Chapter 7 bankruptcy. They can usually recover funds up to 90 days before the filing or a year if the creditors are insiders like relatives, friends, or associates.

If a creditor cannot return the payment, the trustee may work to negotiate a settlement with your creditors. The trustee will urge the creditor to return the amount if it is a preferential transfer.

Bankruptcy filings require a precise comprehension of the rules and guidelines to streamline the process. You should consult a bankruptcy consultant that can help you navigate the process. Contact us at Charles J Schneider PC to learn how we can help you with your Chapter 7 bankruptcy today.

An Overview of Chapter 12 Bankruptcy

Mon, 17 Oct 2022 23:30:59 GMT

If you are a farmer or fisher and must file for bankruptcy, Chapter 12 bankruptcy may be the right option for you. This type of bankruptcy has special provisions for farmers and fishers. It allows you to keep your property while repaying your debts over time. In this overview of Chapter 12 bankruptcy, we discuss its history, how it works and what you need to do to qualify.

Historical Background

The Family Farmers Act of 1986 enacted Chapter 12 as part of the Bankruptcy Code. The Act completely revised federal bankruptcy law. Before the introduction of Chapter 12 bankruptcy, the United States Constitution only allowed farmers and fishing families to file for bankruptcy protection under Chapter 11 or 13. However, these chapters did not provide the same level of relief as Chapter 12.

The chapter was created in 1986 in response to the growing number of farmers who were declaring bankruptcy due to falling farm prices. Chapter 12 bankruptcy gave special provisions to farming families that filed for bankruptcy. For example, it allowed farmers to repay their debts over a period of three to five years.

The United States Congress and constitution intended for Chapter 12 bankruptcy to be a temporary relief program. However, numerous extensions prolonged its application until its permanent enactment in 2005. Chapter 12 bankruptcy has undergone numerous modifications to improve its application. The most recent modification hails from The Family Relief Act of 2019.

The Farmer Family Relief Act modifies Chapter 12 bankruptcy by increasing the amount of allowable debt from $3.3 million to $10 million. The Act also expands the definition of "family farmer" to include certain farm businesses that are organized as partnerships or limited liability companies.

Qualifications

Farmers and fishing families should have the following qualifications for Chapter 12 bankruptcy:

The individual or the individual and their spouse must have a commercial farming or fishing operation.
Total debts cannot exceed $11,097,350 for farming businesses or $2,265,500 for fishing enterprises.
The debt must arise exclusively from the business, with at least 50% in farming and 80% in fishing operations.
More than 50% of the family's gross income must originate from the farming or fishing business within the previous year.

Chapter 12 Mechanisms

Chapter 12 bankruptcy allows farming and fishing family farmers to reorganize their finances and pay off their debts over three to five years.

One of the main benefits of Chapter 12 bankruptcy for family farmers and fishers is the ability to repay debts over a longer period. This provision can help families that are facing financial difficulties and still need to maintain their operations.

The first step in filing for Chapter 12 bankruptcy is to file a petition with the bankruptcy court. The petition must list all the debtor's creditors and the debtor's income, expenses, and assets. The debtor must also file a plan that outlines how the debtor intends to repay their debts.

Once the family files the petition and plan, the court will appoint a trustee to oversee the case. The trustee's job is to ensure that the debtor's plan is workable. The court will also ensure the plan treats creditors fairly. Creditors will then have an opportunity to object to the debtor's plan.

If the court resolves all objections, it will confirm and help implement the plan. Afterward, the debtor will make payments to the trustee. The trustee will then distribute the payments to creditors according to the plan's terms.

If you need to file for Chapter 12 bankruptcy, consult a specialist or firm to help you with the process. Contact Charles J Schneider PC today for assistance if you live within Detroit.

The Potential Consequences of Filing for Bankruptcy

Fri, 09 Sep 2022 17:01:38 GMT

Bankruptcy is a legal process that allows people or businesses to restructure or eliminate their debt. For many people, it's a complex process that requires the help of an attorney.

What makes bankruptcy such a big deal? For one, its consequences can be pretty severe. You need to understand these before you decide to file for bankruptcy. Here are some of the potential consequences.

Loss of Property

Both Chapter 7 and Chapter 13 require that you surrender some of your property to help repay your debts. This may include your car, home, jewelry, or other valuable possessions.

And it's not just you who's affected — co-signees on your loans can also have their property taken away.

Chapter 7 bankruptcy, in particular, can be very difficult for people who own a lot of property. This is because the trustee assigned to your case will sell off your property to repay your creditors. You can only exempt a certain amount of property, so anything above that may be at risk.

Chapter 13 is typically more lenient in this respect. You may be able to keep most, if not all, of your property. But you'll still have to repay your creditors. You can stagger these payments over the life of your repayment plan, which is usually three to five years.

Damaged Credit

Any negative information on your credit report will make lower your credit score. A low credit score means you're a high-risk borrower.

Lenders consider bankruptcy a serious negative when it comes to your credit. That's because it shows that you were not able to repay your debts.

To make it worse, bankruptcy can stay on your credit report for up to ten years . That means it will be hard for you to get approval for a loan or credit card during that time. Lenders will either decline your application or charge you a higher interest rate and unfavorable terms.

However, the long-term effects of bankruptcy aren't all bad. Bankruptcy is a chance to start over. After a few years, you can begin to rebuild your credit score by making on-time payments and keeping your balances low. You won't have outstanding debts hanging over your head, which will help you financially in the long run.

Psychological Impact

Filing for bankruptcy can be a very stressful process. It's not uncommon to feel overwhelmed, anxious, or even depressed.

You may feel like you're losing everything you've worked so hard for. And it can be hard to see a way out.

It's important to remember that bankruptcy is not a reflection of your personal worth. It's a legal process that can help you get a fresh start.

If you're feeling overwhelmed, talk to a therapist or counselor. These trained professionals can help you deal with the psychological impact of bankruptcy.

Affects Job Prospects

If you're already employed, filing for bankruptcy will not automatically get you fired. However, it may affect your job prospects in the future.

Employers often do credit checks as part of the hiring process. They may not hire you if they see that you've filed for bankruptcy.

Some employers view bankruptcy as a sign that you're not responsible with money. Others may worry that you'll be unable to handle the company's finances if they hire you.

Hire a Bankruptcy Lawyer

Bankruptcy might be the only way to get out of debt, but it's not a decision to take lightly. When entering bankruptcy, consult with a bankruptcy lawyer. They will help you understand the process and what to expect.

At Charles J. Schneider, P.C. in Michigan, our team of compassionate and knowledgeable bankruptcy attorneys will guide you through every step of the bankruptcy process. Contact us today for a free, confidential consultation. We're here to help.

Chapter 13 Bankruptcy: What to Know

Wed, 22 Jun 2022 15:52:42 GMT

Many people struggle with debt, and bankruptcy is a way to finally get out from under all that debt. While many forms of bankruptcy exist, Chapter 7 and Chapter 13 are the most common. If you would like to know more, find out about Chapter 13 bankruptcy.

1. Who Is a Good Candidate for Chapter 13 Bankruptcy?

You may be a good candidate for bankruptcy if you have a lot of debt. You must be able to show that you do not have enough income to repay the debt. Some debt, however, is excluded from bankruptcy. This includes school loans, past taxes, or child support. However, if you have lots of debt from credit cards, loans, home loans, and medical bills, you could be a good candidate for bankruptcy.

If you want to file for Chapter 13 bankruptcy, you'll need to show that you do have a steady source of income, are current on your taxes, or haven't filed for bankruptcy recently, and you must not exceed dollar limits on secured and unsecured debt.

2. How Does Chapter 13 Differ From Chapter 7?

The main difference between Chapter 13 and Chapter 7 bankruptcy is the repayment plan. With Chapter 7 bankruptcy, you keep your important assets like your main vehicle, but you'll have to sell off anything else that is valuable such as a second vehicle or property. Depending on your situation, you may or may not be allowed to keep your home.

If you have more assets you want to keep, such as a house or multiple cars, you may want to consider Chapter 13. With Chapter 13, you don't have to sell anything, but you will have to reorganize your repayment plan. Typically, the repayment plan lasts three to five years, and you will lose your tax returns for most of those years. The tax returns help repay the debt.

3. Do You Have to Repay the Full Amount You Owe?

When you file for Chapter 13 bankruptcy, you include all your debt into the repayment plan. This includes debt for which you aren't filing bankruptcy, such as your school debt. The mortgage, however, is often excluded. When you pay, the money is divided to pay the various bills. With priority debt, such as your mortgage, tax obligations are paid in full.

You don't have to fully repay your unsecured debt, which includes loans or credit cards. You will have to make sure all your disposable income goes toward the debts, and the amount you pay in total depends on how much you can afford. Ultimately, however, creditors will receive as much as or more than what they would have received if you filed for Chapter 7 bankruptcy.

4. What Happens After the Repayment Plan Is Complete?

Once the repayment plan is complete, your attorney will stop any automatic withdrawals from your paycheck. Even if you didn't repay all the debt, you no longer must keep paying the unsecured debt. You will have to start repaying your own secured and priority debt again on your own, such as your car loan and school loan.

Chapter 7 bankruptcy remains on your credit report for 10 years, and Chapter 13 bankruptcy remains on your credit report for seven years, but that includes the years during the repayment plan. So, after repayment, you may only have two more years with the bankruptcy on your credit report. You can start rebuilding your credit by paying bills on time and in full.

Bankruptcy can be scary, but it can also be the thing you need to finally take financial control of your life. With Chapter 13, you create a repayment plan, which allows you to keep more assets. If you would like to know more, contact us at Charles J Schneider PC today.

How Bankruptcy Puts a Stop to Collection Actions

Wed, 08 Jun 2022 16:47:19 GMT

Creditors have a variety of ways to collect debts, but the ones they favor are liens, garnishments, and repossessions. These powerful legal actions can inspire fear and hopelessness. Here's how filing a chapter 7 or 13 bankruptcy stops these collection actions in their tracks.

Immediately End Wage and Bank Garnishments

Having a creditor directly take money from your paycheck or bank account sounds like something from a dystopian movie, but it's a reality millions of people deal with daily. Creditors can obtain court judgments letting them seize up to 60 percent of your wages and the money in your bank accounts, depending on the debt type and state laws.

When you're already struggling to make ends meet, losing even a few dollars can mean the difference between keeping your head above water and sinking. While there are many ways to stop the garnishment, one of the easiest and fastest is to file for bankruptcy.

With rare exceptions, the day you submit your petition, your creditors are subjected to an automatic stay mandate prohibiting them from continuing any and all legal actions against you. All garnishments must stop, and any money taken from you after the bankruptcy was filed must be refunded.

The automatic stay remains in effect until your bankruptcy case concludes, which will take about four months for a chapter 7 or up to five years for a chapter 13. Since there's a high probability the debt that triggered the garnishment will get discharged, you won't have to worry about it anymore at that point.

Remove Debt Liens

Another tactic creditors like to use is to put liens on valuable assets, such as homes and recreational vehicles. Depending on the debt and the lien type, a court judgment will either let them take the property attached to the lien or force the debtor to pay the creditor what's owed when it comes time to sell the asset.

For instance, a contractor puts a lien on a customer's home for unpaid work. When the homeowner sells the property, they must pay the lien before the house can be transferred to the new owners.

There are several ways bankruptcy can help you deal with liens. In some cases, you can strip the lien from the asset, meaning the creditor will no longer have a legal claim on your property and can't force you to pay the debt out of the proceeds from a sale.

In other cases, you can force the creditor to reduce the amount you owe to the value of the property with the lien attached. For example, you used a moped as collateral for a personal loan. The moped is valued at $800 but you owe the creditor $1,500. You can use a chapter 13 bankruptcy to force the creditor to reduce your debt to $800. The other $700 just gets washed away.

There are a few other ways bankruptcy can make liens more manageable, but they often involve complex rules or strict qualifications. Thus, it's best to come in for a consultation with a bankruptcy attorney who can explain what you need to know to successfully use these methods to your benefit.

Temporarily Halt Repossessions

Debt secured by collateral is the most vulnerable when it comes to collection activity. When a person falls behind on their payments, creditors will take the property securing the debt and sell it to recoup their losses. While it may just be another business transaction for them, it can be a life-changing loss for the debtor.

Luckily, bankruptcy can put a stop to property repossession, at least temporarily. As mentioned before, the automatic stay mandate blocks creditors from performing certain collection actions, and repossessing property is one of them.

The protection only lasts as long as the bankruptcy case is active. However, you can typically get the amount owed on the property reduced or force the bank to refinance the debt to make it more affordable, which can help you achieve solvency long term.

For more information about how bankruptcy can help you manage your debts, give Charles J. Schneider, PC , a call.

4 Things You Should Know About Student Loans and Bankruptcy

Fri, 22 Apr 2022 18:07:39 GMT

Student loan debt has placed a heavier burden on Americans than ever before, with $1.749 trillion in debt distributed among 43.4 million U.S. borrowers and an estimated average debt (when figuring both federal and private loans) of almost $41,000 per borrower. This debt grows even more burdensome in times of inflation and job loss.

If your own student debt principal and interest payments have taken too deep a bite out of your budget, you may wonder whether you should consider filing for bankruptcy and whether filing for bankruptcy could ease your student loan issues. Take a moment to explore the following four key points on this important subject.

1. A Standard Bankruptcy Filing Does Not Discharge Student Loans

When first government-backed student loans first appeared in 1958 , bankruptcy courts treated this form of debt as fully dischargeable. However, in the decades that followed, Congress made it increasingly difficult for borrowers to discharge this debt, adding exemptions first to federal loans and later to all student loans.

As the law currently stands, a standard Chapter 7 personal bankruptcy filing will not do anything to eliminate your student loan debt. However, the relief from other crushing financial burdens might very well free up more of your available funds, which in turn will make those monthly loan payments easier to manage.

2. You Can Pursue a Separate Process for Discharging Your Student Loan

Federal law does allow one possible means of discharging your student loans in connection with a bankruptcy filing. To pursue this path, you would still file for personal bankruptcy, but you must also file a separate instrument called an adversary complaint at the same time. This complaint leads to litigation known as an adversary proceeding.

In an adversary proceeding, you and your lender exchange the necessary preliminary information before going to trial before a bankruptcy court. At the trial, you would do your best to make the case that your current student loan payment agreement places an undue financial hardship on you. The lender gets to make an opposing argument.

3. You Must Meet Hardship Tests to Get Student Loan Debt Discharged

The federal government does not define precisely what it means by undue hardship. Instead, each borrower filing for a discharge must pass certain accepted tests to determine the validity of the request. The most common example involves a three-part evaluation known as the Brunner Test.

To pass the demands of the Brunner test, you must successfully demonstrate that you can't maintain a basic standard of living while paying your debts and juggling your other financial issues. You must also show that this situation will likely continue for much of the repayment terms and that you've genuinely tried to pay the debt.

Not every bankruptcy court relies on the Brunner Test. For instance, your court might employ a standard known as the Totality of Circumstances Test. In this approach, the court will evaluate every factor in your financial life that impacts your overall ability (or inability) to repay the student loan without suffering undue hardship.

4. Student Loan Discharge Can Take a Few Different Forms

Following your adversary proceeding, the bankruptcy court may or may decide to make your student loan debt dischargeable. While this decision leaves you liable for the entire amount under Chapter 7 bankruptcy, you may get permission to make reduced payments for the duration of a Chapter 13 bankruptcy.

In the happiest scenario, the court discharges you from your entire student loan debt, freeing you from undue hardship and endless collection calls. However, the court might discharge only part of the debt, leaving you liable for the remainder. Alternatively, you receive only minimal relief such as a reduced interest rate.

If you want to achieve the brightest possible outcome for your financial future in the face of crippling student loans and other unmanageable debts, you need expert advice from experienced legal specialists. Contact our team at Charles J Schneider PC to share your concerns with us and request our assistance.

Receiving an Inheritance? 5 Answers for Heirs Considering Bankruptcy

Mon, 04 Apr 2022 19:46:21 GMT

Have you received an inheritance or do you expect to receive one in the near future? For debtors in your position, one key concern is usually whether or not you'll lose your inheritance. To help you understand the ramifications of bankruptcy on inherited assets and find the right path to debt relief, here are answers to a few common questions.

1. Is Your Inheritance Subject to Liquidation?

The most burning question you probably have is whether or not your inheritance will even be subject to liquidation to pay creditors. The answer generally depends on the timing of the inheritance and the bankruptcy filing.

If you file bankruptcy after receiving an inheritance, it will generally be included in assets that the bankruptcy trustee can use. An inheritance received in less than180 days from the filing date will also likely be included in the case. Beyond this time frame, your inheritance — like most other assets — is no longer part of the case.

2. Can You Exempt Your Inheritance?

The good news for bankruptcy petitioners is that a set of exemptions exists to help protect certain assets. These exemptions identify the types of goods and dollar amounts that are not subject to liquidation. For example, a Michigan claimant may exempt up to $40,475 in equity in a home. This can be an inherited property or one you bought yourself.

One of the first steps any beneficiary should take is learning about the specific exemptions allowed by their state and on the federal exemption list. Depending on the type of asset inherited and its value, this may solve your problem and allow you to go ahead with filing.

3. Can You Move Your Inheritance?

Those planning for bankruptcy may consider more extreme measures to try to protect assets they may lose. Unfortunately, this includes trying to move, transfer, or hide assets from the bankruptcy court.

While this temptation is understandable, it is bankruptcy fraud and can cause worse problems than you had before. If the bankruptcy court or trustee discovers signs of such fraudulent behavior, they can deny your entire case. You can even be charged with a crime.

4. Should You Pay Debts With an Inheritance?

The decision to use your inheritance to pay off debts should be undertaken carefully. If the money from an inherited asset could prevent you from having to file bankruptcy, it may be worth your while. However, you should be careful not to use assets that would be protected from bankruptcy, as paying off debts with these means losing money you could otherwise keep.

If you do want to pay off part of your debt with an inheritance but may end up in bankruptcy anyway, consult an attorney. Why? You'll need to avoid giving the appearance of fraud through paying debts preferentially, such as paying off a family member rather than your credit card debt.

5. Should You Enjoy Your Inheritance?

If you expect to lose your inherited asset to bankruptcy, should you just spend it beforehand? Perhaps, but be cautious about how you use the money. Spending it on your daily living needs is generally an acceptable pre-bankruptcy use of funds. However, spending it on luxuries solely so that creditors don't get it would likely be deemed bankruptcy fraud.

Where Can You Learn More?

Want to know more about how your inheritance and a bankruptcy case would affect one another? Start by meeting with a bankruptcy attorney in your state. Michigan residents can call on Charles J Schneider PC . We'll help you assess all your risk factors, find the type of bankruptcy that will bring the most relief, and protect the assets you can protect. Call today to make an appointment.

Borrowers, Co-Signers, and Bankruptcy — What Can You Both Expect?

Thu, 24 Feb 2022 15:43:53 GMT

Many bankruptcy cases involve only one individual — the filer, or claimant — and their own personal debts. However, some claimants share debt with other individuals through the process of co-signing, or legally agreeing to pay a person's debt if they do not. Whether you're a co-signer or the person who has a co-signer, protecting both of you starts with understanding how bankruptcy affects everyone. Use this short guide.

How Bankruptcy Affects Co-Signers

Technically, a borrower's bankruptcy doesn't directly involve any co-signers. This is good because the bankruptcy won't damage their own credit. However, it's also tricky because they do not receive any discharge of their responsibility for the debt. In effect, when you receive a debt discharge, this is only a discharge of your legal responsibility to pay it — not the removal of the debt entirely.

The effects of such a discharge on the co-signer depend on many factors, including which Chapter of bankruptcy the main debtor chooses. Chapter 13 cases may receive a co-signer stay, which prevents the creditor from pursuing repayment from the co-signer if the loan is reaffirmed and paid in full. However, Chapter 7 bankruptcy may offer no co-signer protections.

What Actions Co-Signers May Take

Anyone considering bankruptcy should notify their co-signers before filing. Before filing, the borrower may request that a creditor remove a co-signer from the loan to avoid bankruptcy entanglements. This is difficult but may be possible if the borrower is in good standing.

Unfortunately, a co-signer may need to file for their own bankruptcy protection if they can't comfortably pay the debt. The situation may be exacerbated if the lender immediately puts the debt in default and demands payment from the co-signer. If this happens on a large debt, the co-signer's only choice may be to relieve their own financial burden through personal bankruptcy.

How a Co-Signer's Bankruptcy Affects Debtors

What if the co-signer is the one who files for bankruptcy? Again, this doesn't directly affect the borrower's own assets or debt due. And in some cases, this may not even be noticeable to the main borrower. However, the way that a lender responds to the bankruptcy can cause unwelcome problems anyway.

The most common effect is that the borrower's account may go into default or they might be barred from making payments. This can happen due to the automatic stay put on debts or even through the lender being overly cautious about making missteps during a bankruptcy case. Not only can this cause an actual default but will likely damage the borrower's credit score.

What Actions Debtors May Take

The best starting place for a debtor whose co-signer files bankruptcy is to talk with lenders directly. Explain what's happened (or going to happen) with the co-signer and reaffirm the intent to continue paying the debt in full. Advance warning can forestall automatic responses to the bankruptcy notice. If the creditor won't work with the borrower, an attorney may convince them to restore the borrower's good standing.

If the borrower has the means, now may also be a good time to work to remove the co-signer from the loan. The borrower can request this move on an existing loan, but they may need to refinance the loan to separate themselves from the co-signer.

Whether you're a borrower or a co-signer, the best place to begin is by learning more about the possible effects of bankruptcy on your personal situation. Charles J Schneider PC has assisted Michigan debtors with all their debt relief needs for more than 45 years. Call today to get answers to your questions and learn the best first steps to take to protect yourself.

5 Reasons to Choose Bankruptcy Repayment Plans Instead of Liquidation

Tue, 22 Feb 2022 17:53:01 GMT

Many people considering bankruptcy automatically envision the one-time liquidation of assets and discharge of all remaining debts. This is, in actuality, only one chapter of the bankruptcy code, known as Chapter 7. And while it is the right choice for many debtors, it's not the only choice.

Chapter 13 bankruptcy, known for its repayment plan, may be a better choice for you. Why? Discover five reasons to consider it even when it's not required.

1. You Can Keep Your Home or Car

The number one reason many people opt for Chapter 13 bankruptcy is to keep a large secured asset.

A primary home or vehicle can sometimes have protection from Chapter7 liquidation if its equity is covered by exemption rules. However, the amount of equity is limited by both federal and state rules. In Michigan, for instance, many claimants can exempt up to $40,475 of equity in a home. If you have more equity, though, your home may still be on the chopping block.

If your house or vehicles cannot have full protection from Chapter 7 liquidation and you can afford to keep paying the loans against them, Chapter 13 could allow you to keep them. This is true even if you're behind on some payments.

2. You Still Get Discharge Upon Completion

The appeal of Chapter 7 bankruptcy is its full discharge of whatever debts liquidation of assets cannot satisfy. But did you know that Chapter 13 filers also get discharge? When the agreed terms of the repayment plan are done - generally after three or five years - any remaining qualifying debts are discharged when the case closes.

3. You Get More Time

Chapter 7 bankruptcies are the most convenient for many because they can happen in as little as a few months. However, this short resolution means that everything must wrap up quickly and decisively. Chapter 13 bankruptcies take a different approach. In it, the debtor is able to assess their finances, debts, and income to figure out what might need changing for it all to work.

A repayment plan under Chapter 13 can generally be three or five years long. Business repayment plans can be much longer. The ability to reorganize debts and extend loans for more years could make your current obligations manageable. If so, you don't have to put your assets at risk. And during the open case, you still get standard creditor protections.

4. Your Debts Are Renegotiated

What if your debts are not manageable and you can't continue paying as-is for another three to five years? Chapter 13 gives you the chance to renegotiate. You may be able to secure a lower interest rate, reducing monthly payments. You might get a lower payment amount overall, particularly with more years on the term. And the total amount you owe on some loans could be reduced.

Have co-signers on any eligible debts? During the payment plan, co-borrowers often have protection from adverse actions even though you have renegotiated loan terms.

5. Your Credit Is Impacted Less

Finally, consider the effects on your credit history. Both Chapter 7 and Chapter 13 do appear as negative notes on your credit report. However, Chapter 7 bankruptcy remains on your credit for 10 years. Chapter 13 generally remains on it for seven years. This may or may not be a major decision factor depending on your future borrowing plans.

Want to learn more about when Chapter 13 could be the better choice for your bankruptcy claim? Start by meeting with Charles J Schneider PC . We will help you assess your finances, exemptions, eligible and ineligible debts, and goals to find the best chapter for your case. Call today to make an appointment.

5 Moves to Make With Your Bank Account Before Bankruptcy

Mon, 17 Jan 2022 17:00:33 GMT

As you prepare for a bankruptcy case, the actions you take before you file are just as - if not even more - important as what you do after filing. Some of these important steps involve preparing your bank accounts for what happens next. What should you do to protect your assets, avoid accidental fraud, and ensure a smooth process? Here are five things you may need to do.

1. Clear All Checks

The amount in your bank accounts on the filing date is generally what the trustee is authorized to use for debt repayment This can create a problem if you have outstanding charges or checks that haven't cleared the account by that date. You may end up paying these and still seeing the original amount seized by the trustee.

Plan ahead by limiting check-writing as you get closer to the filing. Go through your records to ensure that no older outstanding checks remain either.

2. Identify Exempt Assets

Many people with more than one stream of income put all their money into one place. If all your sources of income and your assets in that account are subject to the bankruptcy, this won't cause trouble and may even simplify things.

However, if some of that income could be exempt, you should identify this now. Your Social Security income or post-filing income, for instance, is generally exempt from seizure. But you'll need to keep close tabs on this to prove it's exempt income. Your attorney may even advise you to open a separate account to prevent the commingling of exempt and nonexempt funds.

3. Stop Automatic Payments

Research and write a list of all automatic payments you have authorized. These could be large payments, such as a car or home loan, or they may be very small, like your Netflix account.

Automatic payments and withdrawals muddy the waters of a bankruptcy case for two main reasons. First, they have the same effect as an outstanding check if they clear after the filing date and require you to pay them back.

Second, the bankruptcy trustee will look for expenses that could indicate accidental or intentional bankruptcy fraud. An annual payment to the wine-of-the-month club may not look good.

4. Separate Assets and Debts

Do you owe any outstanding debts - a car loan, mortgage, or credit card perhaps - to your bank or credit union? If so, consult with your attorney about separating these. The most important reason is to prevent what's known as a setoff. A setoff is when an institution has the legal right to seize money from your account in order to satisfy a debt you owe to it.

Often the best way to prevent this is to use a different banking institution where you hold no outstanding debt. However, you must also avoid the appearance of impropriety when moving money before bankruptcy.

5. Prepare for a Freeze

The financial institution may place a freeze on your account when notified of the bankruptcy. A freeze is an automatic hold on your bank account to protect creditors' rights to nonexempt funds. But if that account also includes exempt funds, you may need to ask your attorney to request that the bank lift the freeze. Keeping some cash on hand may also help you manage the gap if a temporary freeze occurs.

Where to Learn More

Make the most of this period before a bankruptcy filing by consulting with a knowledgeable bankruptcy attorney in your state. They will help you learn which steps to take in your specific circumstances and how to execute them.

Michigan residents can all on Charles J Schneider PC for assistance. We can provide the guidance and help needed to ensure the best possible bankruptcy outcome. Call today to make an appointment.

Answers To Your Questions About Debt Restructuring

Wed, 10 Nov 2021 07:28:32 GMT

Do you struggle with debt payments every month? Like many Americans, you likely have several different options for finding a solution. These can range from the most damaging, including simply walking away from debt, to the most helpful, including bankruptcy filing. But one financial tool that is often overlooked is debt restructuring.

What is debt restructuring? How can it help you? And how can you accomplish it? Here are a few answers.

What Is Debt Restructuring?

When a person or business can't afford the payments on a debt each month, they often see it as an all-or-nothing situation: either you pay the full payment or you don't pay anything at all. But restructuring your debt means working with the creditor to make new arrangements on the same contract, the goal of which is to turn it into a payment you can afford.

A common example of restructuring is a home loan modification. The debt isn't discharged. Instead, the capital owed may be reduced and the lender agrees to be satisfied with partial payment. Alternatively, the lender may agree to fewer fees, a longer term, or reduced interest rates to allow the borrower to make affordable payments while still paying off the capital.

What Are the Advantages of Debt Restructuring?

One of the best reasons to pursue debt restructuring is that it doesn't involve qualifying for new debt. Instead of replacing old debts with new ones, restructuring takes existing contracts and alters them in a way that makes paying them off more affordable. The lender may also be more motivated to participate if the alternative is receiving no payment.

Because it's a negotiation between the borrower and the lender, restructuring can be done relatively informally and quickly. You don't have to file legal protection or wait for any savings to build up. In addition, the borrower may ask for specific remedies based on their particular needs, giving each person more options.

What Are the Disadvantages of Debt Restructuring?

Of course, any means of debt management has its pitfalls. Lenders aren't obligated to offer any concessions toward restructuring, so you may have difficulty convincing them to participate. If the lender believes that they can get full payment in other ways, such as filing for a Chapter 7 or 13 bankruptcy, they may not be amenable to a reduction in what you owe.

Restructuring also requires good negotiation skills and a strong position of leverage. As mentioned, a lender is most motivated when this is the best option for their finances. The debtor may not know how to leverage their position or how to approach the subject of restructuring with a professional loan company.

Finally, if the entire debt isn't satisfied in full, the forgiven portion may be taxable. It may also show up on your credit history as a negative mark that lowers your credit score for a period. Effects like these are determined on a case-by-case basis based on the new agreement.

How Can You Be Successful at Restructuring?

Are you a good candidate for debt restructuring? Find out by analyzing your monthly budget and debts to identify specific adjustments that would make you able to consistently make monthly payments. Many candidates work with a professional to come up with an offer for lenders and the budget data to prove how this benefits them. You should also be a strong negotiator or able to hire someone to help.

Where Can You Learn More?

Want to know more about debt restructuring and how it could help you avoid bankruptcy, afford to keep your home or vehicle, or prevent creditor harassment? Start by meeting with Charles J Schneider PC . We will assess all your debt options and help you choose the one that benefits you the most. Call today to make an appointment.

Can a Creditor Object to Your Bankruptcy? What to Know

Tue, 19 Oct 2021 02:30:36 GMT

Most bankruptcy cases pass through the bankruptcy process with little objection by creditors. Because the bankruptcy system is encoded into U.S. law and companies can prepare for some debts to discharge through it, creditors usually accept discharge and generally have little standing to contest it.

But creditor objection can sometimes happen, and every debtor can do well to understand why and how to defend against it. Learn what you need to know.

How Creditor Objection Happens

Every creditor needs informing after someone files a relevant bankruptcy. They have the right to attend the creditors' meeting, also known as a 341 meeting. In this meeting, your bankruptcy information is presented and you attest to its accuracy. Creditors who attend have the right to ask questions about anything that may affect how much they can get back or that may help show their debt should be non-dischargeable.

If during this meeting or in their own investigation, a creditor discovers something that they believe alters the dischargeability of their debt, they may go on to file a motion to contest some or all of the bankruptcy details. Then, the debtor must defend their bankruptcy claim against this contest, with the bankruptcy closure likely delayed.

Why Creditors Can Contest

Before you worry too much about creditors contesting every discharge, remember that this is actually a rare occurrence and must have legitimate reasons. The cost of objecting in court to a discharge is more than most creditors want to undertake unless they have a very compelling case.

Most objections come from a few serious charges. The first is bankruptcy fraud. If you charged up your credit cards in the 90 days before bankruptcy, a credit card company may argue that you never intended to pay back the debt. Similarly, a debtor who took out a large cash advance may have to prove that they did so for legitimate, necessary reasons rather than to take a vacation.

Fraud could also be a factor if you forgot to include any debts in your filing, if you appeared to transfer assets in advance of bankruptcy, or if you failed to be completely truthful on any forms. Most moves that debtors make are valid, but they can appear to have ulterior motives to an outside party.

A second reason for contests is that the debt resulted from some damage the debtor did willfully and maliciously. A common source of this could be a landlord who argues that the debtor should have to pay for intentional damage they did to the property before they moved out. And debts that arise from certain criminal acts are often not eligible for discharge.

Finally, a contest might occur if the debt falls into a gray area that may or may not be dischargeable based on circumstances. Income tax debts, for example, are dischargeable, but they must fall within certain guidelines. If a tax debt could be construed as outside the dischargeable range, the agency may ask the judge to rule on its inclusion.

Where to Learn More

Could one or more of your debts be a likely subject for a creditor objection? If so, the best move is to work with an experienced bankruptcy attorney as soon as possible. They can help you assess the possibility of a creditor contest, prepare for your 341 meeting to avoid it, and develop a solid case for the inclusion of all debts in your filing.

Charles J Schneider PC can help Michigan debtors with all their bankruptcy needs. Call today to speak with a member of our legal team and start getting answers to your questions. We look forward to meeting with you.

Own Property With Someone Else? Answers To Your Bankruptcy Questions

Tue, 19 Oct 2021 02:30:31 GMT

Do you plan to file bankruptcy but share assets with a partner, family member, or other persons? If so, you may wonder how your bankruptcy

will work with these joint assets. To help you make the best decisions regarding your finances, here are some answers to your questions.

Can You File Bankruptcy With Joint Assets?

The good news for borrowers who struggle with debt is that in all states, you can file for bankruptcy protection either alone or as a couple. The sharing of property doesn't preclude you from seeking the debt relief you need, regardless of the decisions made by any co-owners. So if your partner or co-owner is hesitant to file for protection, you have the option of doing what's best for you.

How Are Joint Assets Liquidated?

While you can claim bankruptcy protection without your co-owner, it does complicate the matter. In an individual bankruptcy filing, the court assesses all the debtor's assets and the debts the debtor is legally obligated to pay. Then, the assets are liquidated in Chapter 7 bankruptcy or used to calculate a repayment plan in Chapter 13 bankruptcy.

However, because a joint asset is not 100% owned by the claimant, the bankruptcy trustee may not be able to use all of it to satisfy one partner's debts. So if you and your spouse are both on the title to your vehicle, many states - including Michigan - generally consider you each to own 50% of the vehicle. If the vehicle is worth $10,000 on the market, it's worth $5,000 to your bankruptcy claim.

Further good news for Michigan joint owners is that the person claiming bankruptcy can use either state or federal exemptions to prevent their portion of the asset from being seized. Federal rules allow you to exempt up to $4,000 of the equity in that vehicle. Therefore, only $1,000 is still subject to seizure. You may opt to use a wildcard exemption to cover the remaining $1,000, and the vehicle is completely exempted.

Are Non-Bankrupt Joint Owners At Risk?

Unfortunately, exemptions and separation of ownership rights don't cover every joint asset. In the example above, a vehicle worth $14,000 would still leave a 50% owner with $3,000 subject to liquidation. To access this cash for the bankruptcy estate and pay lenders, the vehicle might need to be sold. Alternatively, the co-owner could save it by buying out the bankrupt party's $3,000 stake.

An asset that is secured by a joint debt can also create trouble if only one owner declares bankruptcy. In this case, the other owner may become immediately liable for the entire debt.

Should Joint Owners Also File Bankruptcy?

Clearly, the comingling of assets generally affects both owners in any bankruptcy case. For this reason, co-owners should consider carefully their own need to declare bankruptcy as well. If you share significant assets in common, their finances could be seriously affected. However, if you only share one or a few assets, the effect may not be widespread enough to warrant them filing bankruptcy as well.

Couples who share many assets should assess the benefits of filing as a couple instead of individually. This can save time, work, and money if both parties will be at risk by either person's sole bankruptcy.

Where Should You Start?

If you're thinking about bankruptcy but share assets jointly with anyone else, learn the potential effects before making any decisions. Michigan residents and co-owners should meet with the bankruptcy pros at Charles J Schneider PC . For more than 40 years, we have assisted debtors of all sorts to find the best solutions. Call today for a free consultation, and learn how we can help you.

How Chapter 7 or 13 Bankruptcy Can Affect Your Business

Tue, 19 Oct 2021 02:17:34 GMT

Filing for personal bankruptcy can greatly affect your business. Do you believe your business assets are separate from your personal assets? With personal bankruptcy, the two are often inextricably connected. Know how a personal bankruptcy can affect your business before you commit to the process. That way, you can make a more informed decision.

How Chapter 7 Bankruptcy Can Affect Your Business

Chapter 7 bankruptcy involves the liquidation of your assets. Your business or your business assets can become part of that process. In Michigan, a person can claim several exemptions , and many of those exemptions can apply to a business or your ownership of a business.

You can use exemptions to protect business assets, but you still must keep to the exemption rules. For example, Michigan allows for up to a $700 exemption for computers and accessories. You can claim your business computer with this exemption, but you may have to sacrifice some other assets to the trustee for liquidation to do so.

Your stake in a business can also represent an asset the trustee can liquidate to satisfy debts. If you're the sole owner of a business, chances are you might not have enough exemptions available to cover the whole business.

As this is personal bankruptcy, you still need to worry about personal assets you might want to exempt, which might make it impossible to exempt some of the business assets. The best solution is to save what you can by working with a bankruptcy professional to figure out how best to go about the process.

How Chapter 13 Bankruptcy Can Affect Your Business

Chapter 13 bankruptcy doesn't involve liquidation. Instead, you or the bankruptcy trustee will come up with a court-approved plan for repayment of your debts. The plan must take into account your current assets and your current and future income. However, Chapter 13 bankruptcy only happens if you aren't eligible for Chapter 7.

If you do manage to qualify for Chapter 13, your business assets are safe to an extent. This type of bankruptcy requires you to have income

coming in. Chapter 13 seeks out anything that can fall under the category of disposable income, and you must report all that income and potential future income.

If you're a business owner or have a stake in a business, then there's a high likelihood you receive income from the business in one way or

another. That income will have to go toward your debt repayments.

Having income from your business go strictly toward debt can negatively affect any plans you previously had with those funds. If that income from the business is the income you subsist on, then you may have to take large hits to your lifestyle or quality of life to handle the debt repayment, which can last for several years.

How You Can Protect Your Business During a Personal Bankruptcy

Businesses come in a lot of different flavors, and variables exist with bankruptcy that depend on the type of business, its bylaws, and your own position with the business. Some business structures receive different considerations with any type of bankruptcy.

The best way to protect your business, its assets, or your stake in a business is to speak with a bankruptcy professional about your situation.

Having some guidance concerning which steps to take can help you protect your business and business assets or at least mitigate as much damage to these things as possible.

Ask questions and make sure you fully understand the situation before committing to a personal bankruptcy procedure. Solutions exist. To learn more about how to protect your business or shield it from personal bankruptcy, contact Charles J Schneider PC for a consultation right now.

How Do These 3 Methods of Handling Debt Compare to Bankruptcy?

Thu, 14 Oct 2021 17:36:42 GMT

Do you struggle with debt that's gotten too much to handle? If so, you have a few choices in how to get it back down to a place where you can look forward to a positive future. What are some of these choices, and how do they compare to filing bankruptcy? Use this short guide.

Debt Negotiation Vs. Bankruptcy

Debt negotiation, or debt settlement, simply refers to negotiation with your creditors to convince them to accept a lower amount of money than you owe. The basic route many borrowers take is to stop making payments for months so the creditor begins to believe they won't see full repayment. This gives the borrower leverage to make a lower offer and hope it's accepted.

Debt negotiation has several downsides when compared to bankruptcy. First, the debtor is not obligated in any way to accept a lower offer. They may simply say no and pursue other debt collection methods. Second, your credit score is significantly damaged in the lead-up to negotiation because you generally stop making regular payments. Third, the creditor may seek collections before you can save up enough to negotiate.

On the other hand, bankruptcy legally requires creditors to accept whatever funds the court deems appropriate for your circumstances. You don't negotiate with each creditor individually, and you don't have to wait until you save up money or until you have leverage.

Walking Away Vs. Bankruptcy

The simplest route some borrowers consider is simply ignoring their debts. Known as walking away, this approach is generally only applicable to unsecured debts like credit cards. Otherwise, your collateral will be taken away. Walking away generally relies on avoiding any serious collection measures until the statute of limitations on each debt runs out.

Walking away from any debt is a dangerous choice. You have no legal protections and are likely to suffer collections efforts like garnishment of paychecks or bank accounts. You might also be harassed by creditors - possibly for years. Your credit history will stay bad for longer than most other ways to deal with debt. Bankruptcy stops collections efforts and ends the damage to your credit.

Keep in mind that if any creditor does finally give up and write off the debts they cannot collect from you, this will often be taxable income you must report on your income taxes. Canceled debt can cause an unwelcome tax surprise even years after you thought the debt was gone. Debt discharged during bankruptcy is not taxable.

Debt Consolidation Vs. Bankruptcy

Are you considering debt consolidation? This is a common choice for many, and it can be a workable solution for some. Debt consolidation involves taking out a new loan - often at a much lower rate - and using the proceeds to pay off the old loan. You may be able to stretch out the terms, simplify payment, and save on interest.

Debt consolidation can work in some situations, particularly if it makes the combined debt very manageable in the monthly budget. However, unlike bankruptcy, it doesn't actually get rid of any debt. You still pay it all back and you've now extended your debt obligations for more years. In the meantime, anything could happen that may cause you to slip back into trouble.

Chapter 7 bankruptcy, in contrast, can be completed in as little as three months and Chapter 13 bankruptcy is limited to three to five years. Whatever debts are not repaid through liquidation or a payment plan is discharged completely and will not need to be paid back.

Want to know more about how your particular debts would be affected by any of these three approaches? Or how bankruptcy might work in your case? Begin by meeting with a bankruptcy attorney in your state today. Charles J Schneider PC has helped many of your Michigan neighbors conquer their debt permanently. Call today to make an appointment and start making a positive change with yours.

5 Bankruptcy Tips to Help You Avoid a Second One

Fri, 04 Jun 2021 19:47:54 GMT

Most Americans who seek bankruptcy protection avoid the need to file for bankruptcy a second time. But even though this safety net remains a future option for nearly all debtors, you undoubtedly never want to have to make use of it. So what can you do during your first bankruptcy to help prevent another one? Here are five tips.

1. Resolve the Root Problems

What events led you to bankruptcy? Was it a single life event, like a medical emergency or divorce? Or was it a long history of not being able to live within your means? Perhaps you made some isolated unwise choices. Evaluate what you can learn from this experience and how you can use it to help you later.

Your first bankruptcy will wipe out much or all of your burdensome debts, but resolving the reasons you ended up here will help you avoid a second one.

2. Exempt the Right Assets

As you choose the best way to use your bankruptcy exemptions, make choices that will best contribute to your future financial health.

Some exemptions can be personal, such as exempting your grandmother's jewelry collection. Other choices should be based on focusing on building a strong financial future. For example, if you can exempt more of your bank account rather than a second vehicle, you may find the extra savings helps you avoid relying on bad debt when an emergency arises in the future.

3. Use Your Work as a Guide

Filing for bankruptcy requires you to gather a lot of financial information and put everything down in writing. You'll complete worksheets that involve your income and expenses. You will also see standard costs of living in your region. Finally, you can use this knowledge to prepare a repayment plan for the next three to five years.

After doing all this work, use this as an educational experience and basis to craft your budget for the future. Evaluate all your costs once you have themall in one place. Apply what you learn in the mandatory financial education courses. After you complete a payment plan, try to put that monthly money into smart investments instead.

4. Consider Reaffirmation Carefully

The reaffirmation of secured loans is the process wherein a debtor in bankruptcy may keep assets that serve as collateral (such as a home or car) by agreeing to pay the associate loans. This can be a great help to protect your family home or your transportation, but it obligates you to that debt too. Make sure you really need to reaffirm those loans and that you can afford them.

5. Be Careful With Chapter 13

Some debtors have to use Chapter 13 because they cannot qualify for Chapter 7. Others choose Chapter 13 in order to protect more assets. But if you do enter into repayment bankruptcy, manage this process carefully.

First, ensure that you make a workable payment plan and budget so you avoid defaulting on your payment plan and converting to liquidation. Only reaffirm loans you can afford. Next, amend your payment plan as your circumstances change. Finally, if you do have the choice of either chapter, choose the one that results in the best financial situation in the long run - even if it's not the one you prefer.

Where to Find More Help

Want more help to structure your current bankruptcy and learn from it so you avoid a second one? Start by consulting with an experienced bankruptcy attorney in your state. Michigan residents can call on Charles J Schneider PC . With more than 45 years of experience, we can help you put yourself in the best position to thrive in the future and will help you if bankruptcy ever becomes necessary again.

Can Chapter 11 Bankruptcy Help You Get Back on Track?

Thu, 13 May 2021 17:38:49 GMT

For businesses facing economic and financial struggles, bankruptcy can provide the debt relief needed to continue with operations. And one of the most important tools for business debt relief is Chapter 11 bankruptcy.

While you may have heard this term in the news, many small business owners aren't familiar with how it operates and what it may provide for them. To help you make the right bankruptcy choice, here are a few answers about Chapter 11.

What Is Chapter 11?

Chapter 11 bankruptcy is often called reorganization bankruptcy. Although usually filed by businesses, it is open to individuals as well. Chapter 11 allows the debtor to make a plan to improve their business's finances and operational system to get it back on solid ground. It also provides some debt relief assistance to help achieve that.

For instance, if your business had to take on extra loans during pandemic shutdowns, could it recover its finances if those old loans were to have lower payments? Chapter 11 gives you room to do that if it has a high chance of working. Chapter 11 benefits the debtor by assisting them to keep their business going. But it also helps creditors who won't face full discharge of their debts.

Who Makes the Reorganization Plan?

Who makes the plan for how your business will reorganize? Generally, the debtor has four months to present a modification plan to creditors. However, creditors who stand to lose any money from the new plan must agree to it. So the plan needs to be viable and meet the interests of both the debtor business and its creditors. In some cases, creditors may propose a different plan after a waiting period.

Can You Control Your Own Business?

One fairly unique element of Chapter 11 is that the debtor usually can continue to control their business. In many other bankruptcy cases, the trustee actually controls the business stake of the debtor. However, with Chapter 11, the business owners or managers need court approval to make certain transactions - such as selling assets, making substantial changes in operation, signing contracts, or taking on new debt.

What Debt Relief Will You Get?

Debt relief from Chapter 11 comes in three main forms. First, you get the automatic stay against collections efforts that is part of all bankruptcy cases. This protects your business assets and eliminates harassment while you recover.

Second, you get the opportunity to take control of your finances in a way that you wouldn't normally be able to. You can realistically consider things like reduced payments, eliminating problematic sectors of the business, freedom from some debts, and even drastic management or personnel changes.

Finally, Chapter 11 (like both Chapter 7 and Chapter 13) does usually include at least some permanent debt discharge. Depending on the reorganization plan, this discharge may come at the beginning of the plan or at the end of the bankruptcy period.

When Might a Different Option Be Better?

Of course, one solution does not fit the needs of all businesses. Chapter 11 can only work if the business can be salvaged through changes in how it operates. This isn't always possible, and business owners should honestly assess whether such a plan will really work and can be sold to creditors.

In addition, small business owners with a lot personally at stake do well to consider filing personal bankruptcy through Chapter 7 or Chapter 13 instead. Personal debt relief could remove the worst of the business's problems while not affecting its operations the way Chapter 11 will.

Where Should You Start?

If you think Chapter 11 could help you, where should you start? Begin by learning more about this complicated bankruptcy option. Charles J. Schneider, P.C. , can help. For more than 35 years, we have aided Michigan businesses and individuals in getting the debt relief they need. Call today to schedule an appointment.

An Introduction to the Types of Bankruptcy Chapters in the United States

Wed, 03 Mar 2021 17:47:02 GMT

You need to understand the various chapters of bankruptcy if you want to apply for a discharge. The knowledge will help you choose the most suitable chapter for your case. Below are the six types of bankruptcy chapters available in the country.

Chapter 7

Chapter 7 bankruptcy uses most of your assets to settle your debts. You get to discharge the remaining debts. You qualify for chapter 7 bankruptcy if:

You are an individual or business entity (such as a partnership or corporation)
You haven't completed chapter 7 bankruptcy within the last eight years
You haven't completed chapter 13 bankruptcy within the last six years
You haven't failed with a chapter 7 or 13 application within the last 180 days due to noncompliance or voluntary dismissal

Although both individuals and business entities can qualify for chapter 7 bankruptcy, only individual debtors can get a debt discharge.

You should also know that chapter 7 doesn't discharge all debts — it excludes some debts, such as child support. The liquidation also exempts some assets, such as household goods.

Chapter 9

Chapter 9 bankruptcy only applies to municipalities. Municipalities refer to government entities, such as townships, school districts, cities, and counties, among others. Due to the complexities of liquating municipalities' assets, mandatory liquidation of assets is not part of chapter 9 bankruptcy.

Chapter 9 is only available to municipalities that:

Are insolvent
Have a debt adjustment plan
Have a debt-agreement with a majority of their creditors or attempt to make such agreements

As such, chapter 9 bankruptcy mainly helps municipalities to renegotiate debts with their creditors.

Chapter 11

Chapter 11 bankruptcy targets businesses, but it is also open to individuals who don't qualify for chapter 7 or 13. The bankruptcy chapter allows businesses to reorganize their debts, assets, and business affairs to help them manage their debts and financial obligations going forward.

In most cases, chapter 11 bankruptcy involves downsizing business operations to free assets and expenses for settling debts. In some cases, a business has to wind down its operations to use its assets for debt settlement.

Chapter 12

Chapter 12 bankruptcy targets farmers and fishermen. The bankruptcy chapter allows fishermen and farmers to reorganize their finances to avoid liquidation or foreclosure. This bankruptcy chapter is rare and relatively new. You are only eligible for chapter 12 bankruptcy if:

You are a family farmer or fisherman with a regular annual income
Your total debts don't exceed $4,153,150 for farmers and $1,924,550 for fishermen
Over 50 percent of your gross income comes from fishing or farming
Either 50 percent of your total debts related to farming operations or 80 percent of your total debts relate to fishing operations

Chapter 12 roughly resembles chapter 13, with the main difference being on who qualifies for the discharge.

Chapter 13

Chapter 13 is one of the more popular bankruptcy chapters in the U.S. Chapter 13 bankruptcy allows you to use your discretionary income to settle your debts within three or five years. As such, the bankruptcy chapter is popular with those who have valuable assets or significant income.

To qualify for chapter 13 bankruptcy:

Your debts must not exceed a certain limit
You must have a steady and adequate income that you can use to repay your debts
You must be an individual (although individuals can discharge business-related debts for which they are individually responsible)

The repayment plan is central to your chapter 13 plan. You must convince the court of the repayment plan's viability.

Chapter 15

Just like chapter 12 bankruptcy, chapter 15 bankruptcy is also relatively new. You only qualify for chapter 15 bankruptcy if your debt involves multiple countries. For example, you may qualify for chapter 15 if you owe most of your debts to a foreign business. The main aim of the chapter is to promote cooperation between the U.S. and foreign courts.

The above is just an overview of the available bankruptcy chapters. Bankruptcy can be complicated for most people. Charles J. Schneider, P.C., has decades of experience in bankruptcy. We can help you understand which chapter best suits your case. Contact us for a consultation if you are thinking of bankruptcy.

Your Bankruptcy Questions Answered

websitebuilder@thryv.com — Mon, 04 Jan 2021 17:56:39 GMT

Almost everyone struggles with finances at least once in their lives. While being in debt may seem like an impossible hole from which to climb, there are many options, including bankruptcy. The bankruptcy process allows you to get rid of most or all of your debt so you can get your finances back under control. If you would like to learn more, keep reading.

Will You Lose Your Home or Vehicle?

One reason you may be postponing bankruptcy is because you fear what will happen to your home or vehicle when you file for bankruptcy. However, whether you can keep your home or vehicle largely depends on your personal situation and the type of bankruptcy you are filing. Typically, your vehicle can be protected as an exemption.

However, if you are filing Chapter 7 and you own the car fully or have a lot of equity in the car, you may have to sell it (along with some other assets) to help repay some of the debt. In Chapter 13 bankruptcy, you can likely keep your car because you create a partial repayment plan instead of selling assets to help repay some of the debt.

Real estate works similarly in a bankruptcy case. If you own a lot of real estate, you will be expected to sell some or all of the property to help repay your debt. If your home has little to no equity in it, you probably won't need to sell it. The biggest determining factor is whether or not you can pay your mortgage moving forward after the bankruptcy. If you can, you’ll likely be able to keep the house.

How Long Does Bankruptcy Last?

Another reason you may be avoiding bankruptcy is because it takes up a lot of your time before your debt is finally gone. If you file for Chapter 7 bankruptcy, it can take three to four months before you are fully finished with bankruptcy.

With Chapter 13 bankruptcy, setting up and getting the repayment plan approved may only take a few months, but the repayment period can last three to five years before your debt is discharged. Your attorney will help determine which length of payment plan is right for you based on your income and expenses. During the repayment plan, however, your attorney will do most of the work, especially if you have automatic withdrawal for the repayment.

Does Bankruptcy Destroy Your Credit?

Naturally, bankruptcy negatively impacts your credit because it shows creditors you failed to repay one or more loans. Of course, falling behind on payments you can't make or just ignoring them altogether can also negatively impact your credit score.

The more time that passes after your bankruptcy, the better your credit, but the bankruptcy will remain on your credit report for up to six years. This doesn't mean you won't get loans or you'll have terrible interest rates, but it does mean any lender can see the bankruptcy. After six years, however, in most cases, the bankruptcy is removed from your credit report.

How Much Does Filing for Bankruptcy Cost?

Finally, if you're struggling to pay all your bills and debt, you probably don't have much money lying around to pay for an attorney. However, filing for bankruptcy is much more affordable in the long run. You will need to pay a fee of up to $310 just to file , which does not include the attorney's fee.

In most cases, you probably won't pay more than $3,000 to $4,000 for the bankruptcy process and attorney fees. This does not include money you pay in a Chapter 13 repayment plan. Ultimately, however, the cost of bankruptcy is significantly lower than the cost of paying late fines and interest.

If you are struggling with massive amounts of debt, bankruptcy may be the right choice. In most cases, you'll end up saving money, and the bankruptcy won't stay on your credit report forever. If you would like to learn more, contact us at Charles J Schneider, PC, today.

Can High Income Earners Still File Bankruptcy?

websitebuilder@thryv.com — Sun, 06 Dec 2020 18:00:21 GMT

Do you need to seek bankruptcy relief but fear you may have too much income or assets to qualify? Do you have to give up and just keep struggling with your financial issues? No. You still have options, even in surprising situations. Here's what you need to know about being a high-income earner during bankruptcy.

Can a High Earner File Bankruptcy?

Having a high income or even large assets doesn't automatically disqualify you from seeking some form of relief. Different chapters of the U.S. Bankruptcy Code address the needs of different debtors. Individuals have access to both discharge and repayment options. Specific small business owners, such as farmers, have targeted Chapters they may use as well.

So, rather than dismissing the notion of bankruptcy or turning to dubious debt relief offers, go through all the steps of qualifying and learn about all your options before making any decisions.

What Is the Means Test?

The first step for most people is the means test. The means test determines who qualifies for Chapter 7 bankruptcy — the discharge of debts. The first part of the means test is whether your income over the last six months is over the median income in your state. The median number varies by region. A person earning $70,964 in Maryland qualifies just the same as one earning $48,528 in Oklahoma.

What If You Don't Pass Step One?

Don't despair if you don't pass the first part of the means test. That's because you can deduct many of the necessary costs of daily life and perform another calculation.

This calculation allows the debtor to deduct things like housing costs, transportation, food, income taxes, child care, and even church donations. Other expenses, such as court-ordered support, may also be allowable. Different regions have different deduction rules, so you should complete this portion along with a local bankruptcy attorney.

Can Chapter 13 Provide Relief?

If you fail the means test after completing both portions, the main option you have is to seek Chapter 13 bankruptcy. While this chapter doesn't provide for the same immediate discharge of debts as its more popular cousin, Chapter 7, it has advantages.

While Chapter 7 liquidation frees you from the obligations to pay bills you can't afford, it usually requires letting go of related assets. Chapter 13, though, allows you to reaffirm certain loans and keep the attached assets — such as real estate and vehicles. And the repayment plan provides relief because it stretches out debts ( over three to five years ) that would otherwise be immediately due or due within a short time.

What Moves Should High Earners Avoid?

If you have a lot of assets or income, the temptation may be to hide some of these assets or misrepresent your financial situation. This, though, is a bad idea. You might commit bankruptcy fraud — which could not only cause legal penalties but also result in the rejection of your bankruptcy and any relief it might have offered.

What should you avoid, then? Common mistakes include charging up new debt or buying luxury items before filing, transferring assets to other people, failing to disclose assets or income sources, and paying off certain debts preferentially.

Where Can You Learn More?

Certainly, bankruptcy filing is more complex when you have more money to work with. But it's still possible and it still brings help in various ways. Start by learning more about all the alternatives from an experienced bankruptcy attorney in your state.

Charles J Schneider PC has assisted Michigan residents with all their bankruptcy needs for more than 40 years. Make an appointment today to get started.

Answers to Your Questions About Bankruptcy Discrimination at Work

Mon, 02 Nov 2020 18:03:31 GMT

Bankruptcy is an important legal tool to manage and get rid of past debt problems that weigh you down. But it has the potential to make some parts of your life more complicated. For some claimants, this includes their work situation. How can bankruptcy affect your job? And what can you do about these concerns? Here are a few answers to your questions.

Does Your Employer Have to Know?

The amount your employer has to know about your bankruptcy depends on what triggered it and which bankruptcy you file. Chapter 7 — liquidation bankruptcy — doesn't automatically result in your employer being notified. Only creditors and other stakeholders are given notice. However, Chapter 13 repayment plans may eventually involve your workplace because the court may withhold your payments through garnishment.

Beyond these circumstances, how much you tell your current employer is generally up to you. The law doesn't require you to go to your boss and tell them about your bankruptcy on your own. It can be challenging, though, to keep the effects entirely to yourself.

Can Your Employer Penalize You?

Technically, the bankruptcy code protects employees from discrimination based on their bankruptcy. Government employees, in particular, are protected from both termination over a bankruptcy and being denied a job due to one. Private businesses are also prohibited from terminating an employee due to their bankruptcy, but may not be protected as well during the hiring process.

What Makes Bankruptcy Rights Hard to Protect?

Unfortunately, the existence of laws against discrimination doesn't mean it cannot happen. Bankruptcy filings are a matter of public court records, so your employer may find out about it. This is a particular concern if you apply for a new job and go through a background check. Some employers may take advantage of the lack of legal clarity regarding denying a debtor a position.

The main challenge to remedying bankruptcy discrimination is that it can be hard to trace. Obviously, if your employer has a history of firing people going through bankruptcy or not hiring those who had a bankruptcy, this pattern can be easy to demonstrate to a court. More likely, though, you may have a hard time establishing a clear link between your debt issues and not getting that promotion or job.

In addition, the causes of your bankruptcy might be something an employer can consider when making decisions. Employers are allowed to do credit checks with permission. Your poor credit history or large debt could be used to determine if you should be hired for a certain job or given more responsibility. These can give the impression that you can't be trusted or relied upon — no matter how false this really is.

What Should You Do If You Are Concerned?

The right path to managing bankruptcy and your employment depends on each unique situation. Some debtors might choose to approach their employer (or potential employer) to get the matter out in the open. If your bankruptcy was due to a bad divorce, for instance, providing context may prevent an interviewer from holding poor credit against you. This is particularly important if seeking jobs with security clearance.

Before you decide how to talk to current or future employers about your bankruptcy, consult with an experienced bankruptcy attorney. And if you feel you may already have been subjected to some form of discriminatory or retaliatory behavior, a qualified lawyer will help you figure out your next steps. Because bankruptcy discrimination law can be vague, you must know your rights and defend them.

Charles J Schneider PC has aided Michigan residents for more than 40 years. We can help you not only manage your actual case but also navigate any consequences that may affect your ability to find relief and recover quickly. Call today to make an appointment.

Minimize Asset Loss With These Three Chapter 7 Bankruptcy Prep Tips

Tue, 06 Oct 2020 18:19:58 GMT

Just like taking a test without studying first almost guarantees a bad grade, filing chapter 7 bankruptcy with no preparation can ensure you'll lose valuable assets. To retain as much money and property as possible, take a moment to do these three things before heading to bankruptcy court.

1. Protect Your Cash

While cash in your bank accounts is counted as part of your bankruptcy estate, you can use exemptions to keep the trustee from taking it. For instance, in Michigan, welfare and unemployment benefits can't be touched, and you can use federal exemptions to protect up to 75 percent of earned but as yet unpaid wages.

However, the threat to your account funds can also come from your financial institution. If you owe money to the bank for another account you have with it (e.g. credit card or personal loan) that will be wiped out with your discharge, the bank may freeze your account so it can perform an offset.

An offset is when the bank takes money from your accounts to pay debts you owe it. The automatic stay prohibits the bank from snatching the cash right away, but it's perfectly legal for it to freeze the account so you can't take any money out either.

As you can imagine, this can worsen your already fragile financial situation. So, prior to filing bankruptcy, protect access to your cash by removing what's in the account and redirecting automatic deposits to a different financial institution whom you don't owe. This reduces the risk you'll be cut off from your money when you need it most.

2. Account for Expected Inheritances

Generally, cash and assets you receive after you've filed bankruptcy won't be included in your estate. If someone gives you an expensive piece of jewelry after filing chapter 7, for instance, you won't have to hand it over the trustee to be liquidated to pay bills.

The exception to this rule, however, are inheritances. Bankruptcy law may let the trustee confiscate any inheritance debtors are eligible for within 180 days of filing bankruptcy, even if their cases have already been discharged.

The clock starts when the individual giving you the asset dies — not when you receive it. So even if you don't get the money or property until a year after you filed bankruptcy, you may still be required to hand it over if the individual passed away any time in the six months prior to you turning in your petition. You are also required to report any expected windfalls to the court. Because of these reasons, your best option is likely to work with an attorney to protect the inheritance before you file.

This protection may include getting creative with exemptions to cover the value of the inheritance. Another possible option could be to have your benefactor put the assets in a trust prior to their death. As a last resort, you could wait and file after the deadline passes.

Regardless of what you ultimately decide to do, be sure to run your plan by a lawyer to avoid making a mistake that could get you accused of bankruptcy fraud.

3. Gather Gift Records

Speaking of bankruptcy fraud, the court will watch for transactions that indicate a debtor is hiding assets. One of the most common ways people hide assets is by transferring money and property to friends and family members. They may claim those items were gifts but, in reality, it's an asset-laundering arrangement.

According to Upsolve, if you genuinely gave someone a cash gift or property valuing $600 or more, you have to report it to the trustee and should provide any records proving it was a gift. Otherwise, the court may think you're trying to hide assets and file a clawback lawsuit to force the recipient to either hand over the property or pay its monetary value.

For more tips on preparing to file chapter 7 bankruptcy or help with your petition, contact our office for a consultation.

How Are Friends, Family, or Partners Affected By Your Bankruptcy?

Thu, 03 Sep 2020 18:22:30 GMT

If you are considering bankruptcy, you're undoubtedly concerned about how it might affect you personally and financially. But you may also wonder about collateral effects on those around you. Will your spouse, your children, your parents, your employer, business partners, or even other family and friends be affected?

Here are some answers that will give you peace of mind and help prevent problems.

Is Your Spouse or Partner Affected by Bankruptcy?

The biggest question many people in long-term relationships have is how their partner may be affected if they declare bankruptcy. The answer has many facets. First and foremost, bankruptcy is a personal declaration, so even a spouse is not automatically involved. One spouse can declare bankruptcy whether or not the other does.

However, the big factor is how intertwined your finances are. If your partner is a joint holder of any debt — such as a mortgage or credit cards — the lender will likely turn to them for full payment. And if you opt for a debt repayment plan, your spouse's income and expenses will generally be considered when determining what you can pay. So your partner may or may not need to seek their own bankruptcy.

Is Your Parent or Child Affected by Bankruptcy?

Family members, like spouses, are not directly involved in any other member's bankruptcy petition. But they may be linked by financial obligations. If your parent co-signed loans from which you're seeking discharge, for instance, they will likely still have their own obligation to pay these. And if they loaned you money directly, they would be treated just like any other creditor and may not see full repayment.

Are Business Partners Affected by Bankruptcy?

Business partnerships and personal bankruptcy can be tricky. If your business is a C corporation, a shareholder's bankruptcy is unlikely to affect the company and other shareholders. It may even make things easier if you have been suffering from harassment from collections efforts. Any loans you have from the corporation could be included in bankruptcy, though, and it may be impossible to give them priority.

If your business is a partnership or S corporation, though, a personal bankruptcy of any partner could affect the other partners if they are personally liable for related debts. Once one partner's obligation is waived through bankruptcy, creditors may come after the other guarantors. One good solution may be to refinance or modify those specific debts.

Is Your Employer Affected by Bankruptcy?

The good news is that your current employment may become easier after bankruptcy protection. If creditors have been violating rules about attempting collections on company property or have reached out to your colleagues or clients, bankruptcy will stop that harassment. And if anxiety and financial juggling has sapped your sleep or caused depression, you may find it easier to focus on being a great employee.

Are Friends Affected by Bankruptcy?

Bankruptcy is often a taboo subject, but it can make your personal relationships better. Debtors who have been hounded by bill collectors or face repossession, for instance, may have had a hard time personally. If your friendships have suffered during your debt struggle, bankruptcy is a chance to start over without that weight on your shoulders.

As with family members, though, any friends who loaned you money would be treated like any other creditor with regards to repayment. If the idea of a friend not being paid back could affect your friendship, discuss the idea of making voluntary payments once bankruptcy is completed.

Do you have questions related to your specific personal relationships or financial entanglements? Learn how you and your circle could be affected by speaking with the bankruptcy pros at Charles J Schneider PC . We can help you know what to expect and how to prepare any friends or relatives who may be accidentally involved as you seek debt relief.

When to Use or Avoid Credit Cards Before Bankruptcy

Wed, 05 Aug 2020 18:29:10 GMT

If you are seriously planning to declare bankruptcy and gain relief from a financial crisis, your actions in the period leading up to the bankruptcy can have a big impact on its success. One area that can cause confusion among debtors in their pre-bankruptcy life is how to use credit cards.

Used wisely, credit cards can be a lifeline you need until the bankruptcy protection takes effect. However, used unwisely, they can make your situation more fraught. Here's what you need to know in order to avoid any pitfalls.

Use Credit Cards as Needed

The biggest question you may have as bankruptcy approaches is whether or not you should use your credit cards at all. The short answer is generally yes. Bankruptcy courts understand that credit card usage is one of the most common ways that those struggling financially can keep themselves fed and clothed. So use of a card for necessities isn't automatically a major issue when processing your petition.

While a variety of factors affects how you should use those cards, the rule of thumb is that you should not do without something needed to maintain your health, safety, and welfare just because you have to charge it. Remember that debt is a temporary problem, so don't turn your anxiety over it into a permanent problem instead.

Don't Go on a Spending Spree

Just because you can use a credit card before officially filing bankruptcy, though, doesn't mean you should use it for anything. Never take the attitude that your debt will be wiped clean, so you should charge up your card before seeing it discharged. This is bankruptcy fraud, and courts will likely refuse to wipe out this debt.

Bankruptcy law has a few rules in place to define fraudulent debt usage. Purchasing more than $725 of luxury goods and services in the 90 days leading up to bankruptcy is considered fraudulent activity. The judge may rule this type of debt non-dischargeable. Likewise, it may be fraud if you take out a cash advance of $1,000 or more within 70 days of bankruptcy.

Of course, the definition of luxury goods and services is somewhat open to interpretation. Legally, it includes anything not reasonably necessary to support you and your household. Some luxuries are obvious — such as vacations, spa treatments, expensive dinners, or new jewelry — but others may be less clear. If you plan to charge something that may be questionable, talk with a lawyer first.

Remember Your Bankruptcy Chapter

The final element in wise use of your credit cards is to understand how they will be treated during bankruptcy. Not all bankruptcies, after all, completely discharge debts.

If you will file Chapter 7, your goal is to have non-exempt assets liquidated in order to pay against qualifying debts. What remains of these debts will then be discharged completely. However, Chapter 13 creates a payment plan in which you agree to pay a stipulated amount for three to five years. Depending on your situation, you might pay off only some of the debts or you may be responsible for all of them.

Because the amount you will be responsible for during and after bankruptcy varies, handle credit card debt now in the way that will cause the least amount of difficulty in the future.

Start By Meeting With an Attorney

Do you have questions about credit card debts in bankruptcy, the effects of specific purchases, or which Chapter is right for you? Start by meeting with an experienced bankruptcy attorney as soon as possible. Charles J Schneider PC can help. Call today to make an appointment and get the guidance you need to navigate the path to true debt relief.

Multiple Properties, Allowed Exemptions, and Other Homeowner Issues During Bankruptcy

Thu, 02 Jul 2020 18:35:29 GMT

Bankruptcy does not mean that filers lose all their assets. Many people that file bankruptcy keep their home and some even maintain ownership of additional properties. Anyone that owns more than a primary residence, however, may need guidance during the bankruptcy process to ensure they make decisions that will benefit their future.

Know the Exemptions

Under Chapter 7 bankruptcy, a primary residence qualifies as a homestead. The owner can keep any home as long as they only have up to $40,475 in equity in the property. Homeowners age 65 or over can have $60,725 in equity. The homeowner must stay current on their loan or have the means to pay any missed payments to qualify.

Married couples may want to use a federal exemption that allows them an equity amount of up to $50,300 per couple. If the homestead does not use the total equity amount, the excess can go towards exempting a second property. The use of the federal exemption for a property requires people to use federal exemptions for all other assets and this may not benefit all filers.

According to Michigan Bankruptcy law, homeowners may also save a second property with the $3,500 asset exemption allowed in Michigan. The law allows the exemption to apply to real property if it is not in the same city as the homestead or includes over 40 acres of land.

Property owners with a valuable property that exceeds the exempted amount or who have too many properties to preserve under a Chapter 7 bankruptcy should file for Chapter 13 protection instead. Chapter 13 requires a repayment plan with creditors rather than a discharge of the debt, but it enables the debtor to keep more of their assets.

Weigh the Risks

In some situations, keeping a house is not the most beneficial option for the filer. If the equity in the property exceeds the amount exempted by law, for example, the debtor must pay the creditor the difference to keep the property. Using all available cash or selling another asset, like a family vehicle, to raise funds may cause continued hardship after the bankruptcy.

People must prove an ability to repay their loans if they wish to keep any property. Even if someone has the income available to make the payments after discharging other debts, the amount of the loan payments may still hold them back from their plans for the future.

A Chapter 7 bankruptcy requires the filer to catch up on their mortgage and stay current during the bankruptcy process. Chapter 13 filers will need to include any late fees and back payments in their repayment plan or negotiate to have the amounts removed or reduced.

Another concern is that creditors could seize property, even a house with a homestead exemption if the filer used it as collateral on a loan they want the court to discharge. The law allows creditors to liquidate property to pay off the debt.

Review Other Options

Chapter 11 is another option for property owners with multiple properties or valuable assets. Chapter 11 helps businesses to negotiate more favorable debt repayment plans, but individuals can also use the option. Chapter 13 is for people with up to $1,081,400 in secured debt, and $360,475 of unsecured debt. Chapter 11 can help those with debts that exceed these amounts.

Filers of Chapter 11 reorganization plans have more time to repay the overdue payments on their loans. The option also helps those who owe more on a loan than the value of the property because the plans often factor the payments based on the fair market value of the asset instead of the outstanding loan balance.

The bankruptcy protection needed, and whether or not you should keep the property or let it go, can depend on a variety of circumstances. Every case varies, so anyone who wants to improve their financial future should have guidance during the bankruptcy process. At the office of Charles J Schneider PC , we can help you choose a plan that works best for you. Call us today.

Car Repossession and Your Chapter 7 Bankruptcy Case

Thu, 02 Jul 2020 18:32:59 GMT

A car or truck is the primary mode of transportation for many people. The loss of their vehicle can represent not only a general hardship but even a strain on their employment.

Aside from houses, vehicles are one of the most expensive items most people buy. Once you miss a loan payment, the late fees and continuing payments can quickly become unsurmountable. You may face repossession. Find out how repossession works in Michigan and how your Chapter 7 bankruptcy can help you get your vehicle back.

Car Repossession

When you finance your vehicle, your lessor has the right to timely payments. If you miss payments, the lessor has the right to repossess your vehicle. In Michigan, they can repossess your vehicle without prior warning. However, they do have to provide you with a letter afterward informing you of the repossession and possibility of getting the car back.

In fact, repossession can be voluntary or involuntary. With voluntary repossession, you acknowledge that you can't afford the payments and you return the vehicle to the lender. With involuntary repossession, agents take the car without your permission. In Michigan, they may not use violence, nor may they enter your home uninvited.

The repossession company may remove loose items stored in the vehicle and store them at a cost to you. They must inform you of the method for collecting your property, though.

Property Redemption and Loan Reaffirmation

You have the option to redeem your vehicle to get it back. With this process, you pay off the loan. Chances are, if you had the funds to pay off the loan in full, you wouldn't have gotten behind in loan payments. That said, you might be able to sell other items or ask for a personal loan from a family member. You'll likely have to pay repossession costs, too.

Another option for getting your vehicle back is to reaffirm your loan. With this process, you must talk to the lender. You work out an arrangement for a new payment plan with the lender. You'll need to ensure the new payment plan is within your budget. If you default on the loan again, your lender will probably hire a repossession company again.

With both redemption and reaffirmation, you must act quickly. Lenders have the right to auction off repossessed vehicles. You often have roughly 10 days to get the vehicle back.

If the lender does auction off your vehicle, you may still owe on the loan. You'll have to make up the difference between the outstanding balance of the loan and the amount the lender received in auction. The lender can sue you for a car loan deficiency, which represents this difference.

Chapter 7 Bankruptcy

When you file for Chapter 7 bankruptcy, you have more options for recovering your vehicle. Ideally, you should file for bankruptcy before your car is repossessed. In that case, an automatic stay goes into effect, which means creditors can't try to collect on your debt — the stay also covers repossession.

Filing for Chapter 7 bankruptcy also gives you some leeway with both redemption and reaffirmation. As part of the bankruptcy process, you have a chance to buy back your car at its current value rather than pay back the outstanding loan. Typically, the current value is lower. You have to make this payment in a lump sum.

With reaffirmation, the negotiation process is the same. However, your lender is likely to be more motivated to work with you. With Chapter 7 bankruptcy, your debt is discharged, which means the lender is likely to get less if you go through with the bankruptcy. If you choose not to recover your vehicle, the loan deficiency will become part of your bankruptcy, which means it may be discharged.

Recovering your car or getting your outstanding loan discharged after a vehicle repossession can be a complicated business. Contact Charles J Schneider PC for legal guidance.

Farmers, Can Chapter 12 Bankruptcy Help You?

Tue, 02 Jun 2020 18:41:36 GMT

Do you own a small farm and are considering bankruptcy protection? Many small farmers face challenging times on a variety of fronts during 2020. Bankruptcy relief can help you not only survive, but also thrive.

The good news is that the U.S. Bankruptcy Code has a chapter designed specifically to aid qualifying farmers adapt to bankruptcy in their unique line of business. It is known as Chapter 12 bankruptcy and here's what you should know about it.

What Is Chapter 12?

Chapter 12 bankruptcy is modeled after the much more familiar Chapter 13 style bankruptcy. This means it is a repayment plan rather than a straight discharge of debts.

Under Chapter 12, farmers get an automatic stay that prevents creditors from pursuing any further collections action while the bankruptcy payment plan is worked out and executed. Creditors generally do not have to approve the terms of the payment plan. At the end of the repayment period — usually three to five years — remaining eligible debts are usually fully discharged.

How Does Chapter 12 Benefit Farms?

If Chapter 12 sounds very much like Chapter 13, it also has some advantages designed with the needs of farmers in mind. For instance, the Code recognizes that farmers and fishing operations are seasonal businesses and can't be expected to make the same income year round. So, the requirement for equal payments is waived — allowing for such things as balloon payments and cyclical adjustments

Another useful change is that the debtor isn't the only one who benefits from the automatic stay. Because many farms and fishing businesses are family operations, other family members are often on the hook for some of the debts incurred by the operator. In Chapter 12, additional persons who are obligated to repay debts may be protected from collections along with the actual debtor.

As you are undoubtedly aware, the farming business faces many dangers that are simply beyond your control. Natural disasters, climate issues, or even personal illness can change your fortunes overnight. Chapter 12 makes allowance for this peculiar threat to the industry by providing the potential to get a discharge even if you can't make all your payments due to an unavoidable crisis.

Finally, one of the most important elements of this chapter is the ability to modify a secured loan to make it less onerous. For example, if a farmer takes out a loan for $60,000 to purchase new farming equipment, several years later that equipment will depreciate to now be valued at only $30,000. In Chapter 12, the debtor farmer may be able to restructure that loan into a new loan of only $30,000.

How Can You Pursue Chapter 12?

If Chapter 12 bankruptcy might be the right option for you, you should first determine your eligibility. Generally, more than half of your income must be generated by the farming business (or 80% for fishermen). In addition, more than half of your debts must come from this business. While there are debt limitations ($4,153,150 in 2020), farmers who are incorporated or work as a partner may also be eligible.

What should be your next move if you believe that your farm operation is eligible? As with any complex business bankruptcy, start by speaking with a bankruptcy attorney. Not all bankruptcy firms specialize in farms, so look for one with plenty of experience in this unique chapter.

Charles J Schneider PC has aided Michigan residents and businesses in finding the right bankruptcy plan and successfully carrying it out until relief by discharge. We can help you too. Call today to make an appointment and get started.

Understanding If You Can File for Bankruptcy a Second Time

Tue, 02 Jun 2020 18:38:31 GMT

Filing for bankruptcy is supposed to represent a fresh start for your finances. Unfortunately, mitigating circumstances, such as injury or illness, sometimes prevent people from being able to take full advantage of that fresh start. If creditors are calling them again, they may wonder if they can file for bankruptcy again.

Filing for bankruptcy even once is a nuanced affair. It becomes more complicated the second time. Several factors go into the second filing, most significantly what kind of bankruptcies are involved.

Prior Chapter 7 Bankruptcy

Chapter 7 bankruptcy sees a debtor's property liquidated and sold off to pay off debts, which are then discharged. If you filed for Chapter 7 bankruptcy and had your debt discharged, you must wait eight years from the time you filed the first time before you can file for Chapter 7 again.

Chapter 13 bankruptcy follows a reorganization plan to pay back the debt over three to five years. You can file a chapter 13 bankruptcy with its repayment plan four years after filing a chapter 7.

Prior Chapter 13 Bankruptcy

To file again for a Chapter 13 bankruptcy, two years needs to have passed from the first time you filed. If you take that action, you'll still be in your original repayment plan. In that event, you may be eligible for a second discharge right after you complete your first repayment plan.

You may want to file for a Chapter 7 bankruptcy after a prior Chapter 13. In that case, you must wait six years from the time you filed for Chapter 13. That said, if you paid off 100 percent of your debt with the repayment plan, the courts may waive the waiting period. They may even do so if you paid off 70 percent of your debt.

In both cases, your original repayment plan must have been in good faith. In other words, you should have proposed a feasible plan that you made a good faith effort to fulfill.

Refiling After a Case Dismissal

Filing for bankruptcy doesn't always result in a discharge of the debt. In some cases, the courts will dismiss the case, which puts you back to being indebted. That situation will affect when and how you can refile for bankruptcy.

The courts can dismiss your case without prejudice if you make mistakes while you're filing for bankruptcy. These mistakes include actions such as a failure to file the correct forms or meet certain deadlines. The courts will rule that you didn't intend to abuse the bankruptcy system, and you'll be allowed to refile right away.

If the courts determine you did try to abuse the bankruptcy system, they'll dismiss your case with prejudice. They'll follow this course for actions such as committing bankruptcy fraud, which involves running up debt with the intention of filing for bankruptcy. They'll also dismiss with prejudice for anyone who files multiple cases to receive the automatic stay.

In those cases, the courts will impose a mandatory period before you can file again. What's more, they may declare that you're not eligible for an automatic stay.

Filing Chapter 13 Without Hope of a Discharge

The goal of filing for bankruptcy is typically to get that discharge of the debt. However, you may find yourself in one of the above-mentioned time periods when you're not eligible for a discharge. You may still find it useful to file for Chapter 13.

For one, as long as you haven't been found to be abusing the bankruptcy system, you should be eligible for an automatic stay, which provides relief from relentless contact from creditors. More significantly, the structure of the repayment plan can help you get your finances back on track because the payments will be more within your means.

If you have any questions about filing for bankruptcy, call the law offices of Charles J Schneider PC .

4 Mistakes to Avoid When Filing for Bankruptcy

websitebuilder@thryv.com — Mon, 11 May 2020 18:46:11 GMT

If you intend to file bankruptcy for the first time, there is a high chance that you are in the dark about the procedure and what to anticipate. This article will highlight the 4 most common and perilous pitfalls you should avoid when filing a bankruptcy petition. You'll also gather some tips to protect you from disastrous financial and emotional consequences.

1. Repaying Close Friends or Family Before You File

If you owe money to your friends or loved ones, you may be tempted to repay them before you kick off the filing process. This may seem to be a great idea, but don't do it. Section 547 of the bankruptcy code prohibits debtors from paying some creditors (whether they are friends or family) more than other creditors within three months before they file.

2. Navigating the Process Alone

Insolvency laws are complex, and you might need the help of an attorney who's familiar with insolvency laws, options, and requirements to help you through the process. Your bankruptcy lawyer can help to safeguard what you value from your creditors. The lawyer can also create a strategy to convince the jury to accept your petition.

3. Choosing the Wrong Bankruptcy Option

When you choose a bankruptcy option, make sure you select the one that will offer the best possible outcome. The bankruptcy chapters include:

Chapter 7

Individuals or businesses are allowed to fill this chapter. Under this chapter, you'll have to sell your valuable property or other assets to clear off secured debts. Whatever debt is left over after you give up your cash and assets will be wiped out.

If you file under this chapter and have no property or money that trustees can use to pay your creditors, your case will be classified as a no-asset case. In this case, you'll not be required to settle your debts (whether they are secured or not).

Chapter 13 (The Wage Earner's Insolvency Plan)

This repayment plan is designed for individuals or sole proprietorship. Under this option, you'll not be required to dispose of your assets or give up any cash. Instead, you'll be allowed to come up with a settlement plan that guarantees that you'll pay all or part of your debts going forward. The amount you pay will depend on the terms of your debt, your income, and the assets you own.

Chapter 11

This settlement plan is reserved for businesses or corporations. It allows companies to retain their properties and other assets, but they have to come up with a plan to outline how they'll repay their creditors.

Chapter 12

This debt settlement plan is for farmers and fishers. The chapter allows a farmer or fisherman to repay their creditors over an extended period, without having to sell or give up their assets.

Chapter 9

This bankruptcy option allows municipals to make comprehensive plans and pay off their municipal debts.

Chapter 15

This chapter spreads foreign debts over a longer time, making the repayments a lot more convenient and affordable.

Remember: Each bankruptcy option has its unique exemptions and loopholes that you can take advantage of. A seasoned insolvency lawyer can help you identify these loopholes and exemptions.

4. Transferring Money, Assets, or Benefits out of Your Name

Intentionally transferring money, properties, or benefits out of your name as you declare bankruptcy is a form of fraud and may be considered perjury. If you want to protect a few assets, your attorney can help you explore various legal options to safeguard the valuable assets from your creditors.

There are more mistakes that people may make when they file a bankruptcy petition, but the few mistakes listed above are the most common. Avoid them; they can ruin your petition. If you have to file for bankruptcy, the seasoned bankruptcy specialists at Charles J. Schneider, PC, can help you protect your assets from creditors. Contact us now for more information.

Bankruptcy Exemptions: The Federal Rules Versus Michigan Rules

Sat, 09 May 2020 19:09:52 GMT

When facing bankruptcy, one of the key ways to protect your finances and your assets is to understand how the exemptions work. Bankruptcy exemptions — assets and money that are not subject to seizure in order to satisfy your debts — allow a debtor to continue their daily life and start over without losing absolutely everything.

In Michigan, debtors are allowed to use either the state's list of exempt property or the federal list of exemptions. Which should you choose? Here are some key differences and similarities so you make the best call for your particular circumstances.

Homestead Exemption

Both Michigan and the federal statutes allow you to exempt a portion of the equity in your primary home. Keep in mind that this is not the value of your home or the loan left. Equity is the difference between what the home is worth and what you owe on it.

The homestead exemption is a big reason why a Michigan homeowner may opt for the state's exemptions. While many states are less generous than the federal exemptions, Michigan's currently exceed them. The state allows more than $35,500 for most homeowners whereas the federal rules only allow around $25,000. You may be able to exempt even more if you are over 65 or disabled.

Vehicle and Personal Goods Exemption

The vehicle exemptions of both Michigan and the federal rules are fairly similar, with the federal guidelines often being a few hundred dollars more than the state. Since most debtors do want to keep their vehicle, those few hundred dollars could be important.

Both federal exemptions and Michigan rules allow you to exempt a set number of personal goods and items used to earn a living. This category includes things such as utensils, decor, furniture, appliances, and books. Here is another place where the federal law may outdo state law. The state allows a combined exemption of about $3,500 while the country-wide exemptions are nearly triple that amount.

Wages Exemption

When determining what you have that could be used to satisfy debts, your paycheck is part of the equation. According to the federal exemptions, all your wages could be included in certain calculations. However, Michigan allows you to exempt a portion for use in daily living. In Michigan, this could exempt between 40 and 60 percent of your wages depending on whether or not you are responsible for the household.

Wildcard Exemption

The last big category of exemptions that most debtors have to worry about is called the wildcard exemption. A wildcard exemption is a set amount of money that you may use to cover something that wouldn't otherwise be considered exempt. You might use it to exempt, for instance, your prize figurine collection or that project car that you want to give to your teenager when they get their license.

The wildcard exemption can also serve as an additional protection for something that’s value exceeds its exemption limit. You could use it to protect additional equity in your home or, more often, your vehicle. You could even add it to your personal goods exemption if you have items that are of more value than allowed.

Michigan doesn't offer a wildcard exemption, but the federal list does. While the amount is not huge — in some cases, just a little over $1,000 — it often may be combined with any unused homestead exemption.

Clearly, there is no one right or wrong answer to which exemption is better. Because of the variations and similarities in both sets of rules, the decision is unique to your own individual assets and debts. And the specific dollar amounts are revised on a regular basis.

The best way to make the right choice is to work with an experienced Michigan bankruptcy attorney. Charles J. Schneider PC is ready to help. Call today to make an appointment.

Your Guide to Buying a Car in Chapter 13 Bankruptcy

Sun, 03 May 2020 18:51:28 GMT

If you have a regular source of income, one option to alleviate the strain of your debt is Chapter 13 bankruptcy. Chapter 13 bankruptcy allows you to consolidate all your qualifying debts into a single monthly payment.

You'll make your Chapter 13 payment for the duration of your bankruptcy plan (between three and five years). When your plan ends, the bankruptcy trustee dismisses the remainder of your qualifying debts.

Some debtors are nervous about filing for Chapter 13 bankruptcy due to the length of the payment plan. A lot can change during the three- to five-year duration of your plan. You may wonder what your options are if you need to purchase a new automobile. Keep reading for everything you need to know about buying a car while in an active Chapter 13 bankruptcy.

You Might Be Allowed to Take on New Debt

Generally, you should avoid taking on new debt while you're in the midst of a Chapter 13 payment plan. However, debtors can take on new debt in certain situations. Before you start shopping for a new-to-you vehicle, you need to procure approval from the bankruptcy trustee to take on the new debt.

To secure approval, you'll need to demonstrate your need for a new vehicle. For example, you might argue that you need a car to get to and from work or that you require a source of transportation to pick up your children. You should also explain that you're seeking to purchase a reasonable vehicle solely for transportation rather than a showy luxury vehicle.

You Need to Know the Impact of a New Loan on Your Bankruptcy Plan Payments

Depending on your bankruptcy trustee's procedures, purchasing a new vehicle may trigger an examination of your monthly plan payment. When you file for Chapter 13 bankruptcy, you agree to use all your discretionary income for debt pay down for the duration of the plan.

Be ready to explain to the bankruptcy trustee how you plan to pay for the new vehicle. They want to make sure that you won't be overextended by the additional monthly payment. Individuals who stretch themselves too thin financially are less likely to successfully complete their Chapter 13 plans.

The bankruptcy trustee may want to examine your finances to determine if you've had an income increase that could trigger an increase in your Chapter 13 plan payment. Small, cost-of-living raises usually don't increase your plan payment, but more significant raises might provide you with leftover income after your expenses.

If your income has gone up, you might be able to argue that the additional expense of your vehicle means that your discretionary income isn't impacted. Don't expect your payment plan to decrease once you buy your vehicle. Though your vehicle is an additional expense, your bankruptcy trustee will likely require you to continue making the same payment as one of the conditions of permitting you to take out a new loan.

You Should Know the Guidelines for Purchasing Your New Vehicle

One of the effects of filing for Chapter 13 bankruptcy is that it negatively impacts your credit. This means that you'll pay a higher interest rate on your auto loan, and you might need to shop around to find a lender who's willing to issue loans to debtors in a Chapter 13 bankruptcy plan.

The higher loan interest rate means that your car payment will be higher than it would be if you had a better credit score. You might be able to lower your interest rate by applying for the loan with a creditworthy cosigner.

Make sure that you consider all the costs associated with purchasing a car (including the loan payment, maintenance costs, taxes, fuel, and registration costs) when deciding if a vehicle is suitable for your budget.

Need relief from your debt?  Contact  Charles J. Schneider, PC, today to see if you're a candidate for bankruptcy.

Walking Away From Debt? 3 Ways It Causes Lasting Damage

Mon, 06 Apr 2020 19:05:12 GMT

When a financial emergency occurs, some Americans may find that they cannot repay their debts due to circumstances often beyond their control. For many, the easiest way to deal with this crisis may appear to be simply to walk away and ignore unsecured debts and debtors.

However, while this may seem easy, is this really the best way to move forward? Or should you go through the extra work of actually declaring bankruptcy? Discover a few ways that walking away can cause ripples of damage for years to come.

1. Ongoing Credit Damage

Unfortunately, when a debtor chooses to ignore their debts, the damage does not come all at once. Debts may become delinquent at different rates. They will advance to the next level of collections efforts on different schedules. Some will be written off by debtors early, resulting in quick hits to your credit, while others might be resold to collection agencies or attain judgments — actions that may restart the debt clock.

The end result to you will be a trickle of continuous credit issues, involving both new and old problems, for years. And you cannot start to effectively rebuild your credit because new hits come all the time.

2. Added Financial Costs

Not paying bills does not mean that they go away. In fact, they actually begin to swell — usually causing more pain and frustration for the borrower.

First, you will likely see interest rates rise on existing debts — sometimes by ten percentage points or more at once. You won't be able to take on new credit at good rates, either. You will experience missed payment fees, late payment fees, and fees to turn on certain services again. Never forget, either, that the principal will continue to build as long as no one makes payments to reduce it.

What about debt settlement, where your creditor takes a portion of the total debt? Not only is this not guaranteed, but forgiven debt will become taxable income that you must declare in the spring when filing income taxes. The added tax could cost you in many ways, including higher tax rates and pushing you over thresholds to lose some credits or deductions.

On the other hand, a legal remedy like bankruptcy stops your debt from continuing to accumulate. It will be frozen at the point at which you file for bankruptcy and creditors cannot add to the pile. Once it is discharged through the court, no further action can be taken on it either.

3. Mental and Emotional Damage

When you face a major life hurdle such as job loss or a natural disaster, you are likely already suffering from mental or emotional trauma. But walking away from debt can add to that emotional turmoil. Debt collectors hound debtors — often more so as the debt ages or moves to new collection agencies. You may be sued for the amount owed. And you certainly will continue to receive worse and worse notices from multiple creditors.

Simply having this debt weighing over you can be its own burden. Many people feel that they will never get free. They work extra hours or forego needed goods and services in order to try to manage their debt. And it causes stress during any attempts to recover from whatever caused the emergency.

Certainly, it may seem like the easy and cheap route to try to ignore your unmanageable debts. But it puts you on a path toward an uncertain future filled with lingering damage. Meanwhile, even though bankruptcy may require additional work, it will reap faster and more reliable rewards.

Learn more about your bankruptcy options by calling Charles J Schneider PC today. Our professional team will work with you to find the most painless solutions to any debt issues.

What Debts Can and Can't You Eliminate With Bankruptcy?

Mon, 06 Apr 2020 19:01:03 GMT

Bankruptcy is a scary word, but it can be the right step for you if you need to get out of debt. While most unsecured debt can be eliminated, there are many debts that are protected, making them hard or impossible to get discharged. If you would like to know more about what you can and can't eliminate with bankruptcy, keep reading.

Car and House Loans

You can absolutely file for bankruptcy for your car and/or home loan, but if you stop making payments, the lender will repossess or take ownership of the car/property. Some lenders may be willing to work with you to reduce the debt or change the repayment plan, so you can keep the car/property.

In other cases, you may simply need the lender to reaffirm your existing loan, but the rates and payment plan is usually the same as the original, so you must prove you can continue to make the car payments.

Personal Loans and Credit Cards

Personal loans and credit cards often financially cripple people, and bankruptcy can help. If you qualify for Chapter 7 bankruptcy, you can usually have these unsecured loans and bills completely wiped away.

If you have a lot of assets you want to keep, such as your home or car, you may need to consider Chapter 13 bankruptcy. Personal loans and credit card debt can be included, but you will have to repay some of the money during the three- to five-year repayment plan.

Medical Bills

One visit to the hospital can financially devastate you, especially if you don't have health insurance. Like personal loans, however, medical bills are considered unsecured debt, which means you can include them in your bankruptcy case.

The one downside to eliminating your medical bills with bankruptcy is the potential broken relationship with your provider. If you owe a lot to a specific doctor, and the debt gets discharged in bankruptcy, the doctor has the right to refuse to see you again, but this is uncommon.

School Loans

School loans can become expensive, making many people want to eliminate them. Unfortunately, school loans can't usually be discharged with bankruptcy. Your only chance to discharge school loans is to prove you can never work again because of a permanent disability.

The courts may also decide to eliminate your school loans if you have been paying them faithfully for years but still are still struggling. The courts will only discharge these school loans if you can prove that you cannot repay the loan because of financial limitations.

Child Support and Alimony

Child support payments (including future and back payments) cannot be eliminated with bankruptcy, and there is typically no exception. Similarly, alimony payments are typically never included in bankruptcy cases.

If you do have an ex-spouse, be mindful of divorce decrees. If you agree to pay off a certain credit card in your divorce (a credit card issued to both you and your ex-spouse), you can't turn around and file for bankruptcy. If you could, your spouse would then be responsible for repayment, which was not the agreement in the divorce.

Unpaid Taxes

In most cases, bankruptcy won't eliminate unpaid taxes and similar debt. Also, if your wages are being garnished for not paying taxes or similar debt, you can't have the garnishment eliminated with bankruptcy.

In some cases, if the money you owe is from a tax return three or more years ago, and you can meet special qualifications, the courts will consider discharging the tax debt.

Bankruptcy gets rid of a lot of debt, which can put you back on track financially again. If you would like to know more about bankruptcy, or if you are ready to get a quote, contact us at Charles J Schneider PC today.

4 Ways to Feel More Confident After Filing for Bankruptcy

Mon, 09 Mar 2020 19:13:56 GMT

Bankruptcy can cause people to feel fear, shame, and frustration among many other emotions. Never see the decision to file as an acceptance of failure or a sign of future money problems. Bankruptcy means that you have taken the first step toward a better financial future. The following suggestions can help you feel more confident and move forward.

#1. Accept the Decision

Bankruptcy often happens after people have tried all other options or have looked at the options available to them and decided bankruptcy was the best choice. Do not have regrets over what did not work out, but instead focus on the brighter path that lies ahead. Bankruptcy offers the opportunity to rebuild credit, restart a career, and end the fear of creditors.

#2. Follow Expert Recommendations

Many experts recommend that bankruptcy filers take a debt management class to learn more about debt and credit. The classes can make people more familiar with how the financial world works and how to avoid problems later. Many non-profit organizations around the country and online offer the courses for free. The classes teach people how to manage their money.

Do not confuse the courses with debt management or debt settlement plans. Settlement plans are through third-party services that charge a fee to help debtors secure new financial agreements with their creditors. The bankruptcy proceedings will handle all debt issues with creditors.

Since 66.5 percent of all bankruptcies take place because of medical debt, it is possible for people to feel they do not need debt education. Consider the course even if medical bills led to bankruptcy. The educational programs focus on credit management and smarter borrowing tips that can help anyone have a better understanding of their finances.

#3. Establish a Plan

Build a budget that reflects how spending and income will look after bankruptcy. Many people describe this moment as a clean slate, but most people still have plenty of expenses to cover. Begin with the idea that something must go into an emergency fund every pay period. Savings accounts reduce the need for risky options like loans and credit cards.

Get help from a parent, friend, or financial advisor to create a realistic budget. The oversight from someone else can help people to stay dedicated to their plan.

It is easy to forget about common expenses and irregular sources of income. Record all spending for a month to discover where all the money goes. The budget should include all sources of cash coming into the home like tax refunds, birthday gifts, and bonus checks from work, not just the paycheck.

#4. Become a Volunteer

People that file bankruptcy will sometimes struggle to overcome their guilt. Some may feel as if they are not paying their way or they have done something shameful. The decision to file would not have been made if it were unnecessary. Selfless actions, like volunteering, can have a positive impact on the psyche.

Volunteering has many benefits for the community and for the person who donates their time. Even two hours a week could be enough to make an impact. Studies reveal that volunteers suffer less from depression and may even live longer. Volunteering also enables people to meet others, develop new skills, and become more attuned to their community.

Bankruptcy is an opportunity for a better life. Every situation differs, but anyone who undergoes the process should do so because they know it is the right choice for them. At Charles J Schneider PC , we will work with you to ensure you feel confident in your choices and your financial future. Contact us today to schedule a free and confidential consultation.

What You Need to Know About Using Bankruptcy to Alleviate Your Tax Debt

Wed, 12 Feb 2020 19:34:18 GMT

While many types of debt can cause financial stress, it's particularly distressing when you owe money to the IRS. If you don't have the financial means to pay the full amount that you owe, the stress associated with this debt skyrockets. One option to alleviate the financial and personal strain of your tax debt is filing bankruptcy. Here's what you need to know about using bankruptcy to get your tax debt under control.

Chapter 7 Bankruptcy May Discharge Qualifying Tax Debt

Chapter 7 bankruptcy is one of the two most common types of bankruptcy used by individuals for debt relief (the other is Chapter 13 bankruptcy). In a Chapter 7 bankruptcy, you allow the bankruptcy trustee to liquidate your non-exempt assets and use the proceeds towards repaying a portion of your debts. The remaining qualifying debt is forgiven.

There are a few situations where Chapter 7 bankruptcy will completely eliminate your tax debt. To discharge your tax debt, all of the following criteria are necessary:

The tax debt must be from income taxes only
There must be no fraud or intentional tax evasion associated with the tax debt
The debt must be at least three years old (from the date of the bankruptcy filing)
You must have filed a tax return for the debt at least two years before your bankruptcy filing
Any tax assessments associated with the debt are at least 240 days old

To qualify for Chapter 7 bankruptcy, you must meet certain income guidelines that vary based on the size of your household and your state of residence.

Previous Liens Aren't Impacted by Chapter 7 Bankruptcy

One issue that some taxpayers have is that their tax debt is so old or they've accumulated so much tax debt that the IRS has placed a lien on their home. Unfortunately, Chapter 7 bankruptcy won't any remove liens that are already on your home. If your home has tax liens, Chapter 13 bankruptcy may be a better option.

Chapter 13 bankruptcy is different from Chapter 7 bankruptcy in that it's actually a type of debt consolidation plan. You repay a portion of your debts for three to five years, and at the end of the plan period, any remaining eligible debt is discharged.

Your plan payment depends on the type of debt you have, the amount of debt you have, your non-exempt assets, your income, and your household size. During your Chapter 13 plan, you can include the debt from your tax lien so that it's covered by your monthly payment.

Chapter 13 Bankruptcy Can Make Your Tax Debt Repayment More Affordable

Chapter 13 bankruptcy is usually a good fit for individuals who have certain types of debt (such as secured debt or priority debt) that they have to or need to pay back. Your Chapter 13 payment uses all of your debt payments to determine your monthly plan payment. For many individuals, their monthly Chapter 13 payment is significantly less than the amount they were using for debt payment.

Under your Chapter 13 plan, your total plan payment will cover all your secured and priority debt (which can include your home loan, car loan, and tax debt), and once you complete the plan, any remaining credit card debt is discharged. If you're struggling to pay all your monthly debt payments, Chapter 13 can adjust the payments so that they're realistic for your budget.

Have tax debt that you're worried about repaying? Contact Charles J. Schneider PC to see if bankruptcy is right for your situation. We can help you file for bankruptcy and build a foundation for a successful financial future.

4 Pros and Cons of Chapter 13 Bankruptcy Instead of Chapter 7

Wed, 12 Feb 2020 19:28:02 GMT

Many people feel like bankruptcy is admitting failure, but it can actually be a beneficial way to improve your financial situation in the long run. If you are considering bankruptcy, you may wonder if you should choose Chapter 7 or Chapter 13. Before you make any final decisions, however, check out these pros and cons of Chapter 13 bankruptcy instead of Chapter 7

1. Pro: It's Easier to Qualify for Chapter 13

If you have a high debt-to-income ratio, and you haven't filed for bankruptcy in the recent past, you should qualify for Chapter 13 bankruptcy. To qualify for Chapter 7 bankruptcy, however, you have to meet certain income requirements that indicate that you are unable to repay any of the debt. If you meet these requirements, all the qualifying debt is wiped away.

Chapter 13 is also a good choice for people with non-dischargeable debts like school loans and child support. While you can't wipe away this debt, you can include it in your Chapter 13 repayment plan. Some people even include late car or mortgage payments if they want to keep the property.

2. Pro: Your Bankruptcy Is off Your Credit Report Sooner

Chapter 7 bankruptcy remains on your credit report for 10 years . Since you don’t repay any of the debt, Chapter 7 is a more dramatic process overall. Chapter 13, on the other hand, only stays on your credit report for 7 years. You may be able to have the bankruptcy removed even sooner, and as time passes, even if it's still on your credit report, lenders are more likely to trust you.

Chapter 13 bankruptcy also requires you to set up a repayment plan for a certain number of years. During this time, you can work on improving your credit score by making payments on time. Therefore, once you are out of bankruptcy, your credit score may be good enough to help offset the bankruptcy on your credit report.

3. Con: You Have to Repay Some Money

The downside to Chapter 13 is the requirement to repay some of the debt, but you don't have to pay it all at once. You can have up to five years to repay some of the debt. During this time, most of your other debt (debt not included in the bankruptcy) may also be included in the repayment plan.

For example, you pay your trustee $1,000 a month, and in return, they pay all the debt included in the bankruptcy, but they will also allocate funds to car payments, school loans, etc. On the downside, however, if you get any tax refunds, they may end up going to your debtors, unless you can prove the repayment plan caused you to fall behind on your own bills, and you need the tax refund to catch up.

4. Con: The Process Is Long

Your repayment plan doesn't have to be five years long, but this option is the easiest way to repay your lenders without going broke in the process. Regardless of what you choose, however, you'll be in bankruptcy for a few years. During this time, you shouldn't incur any new debt, such as on credit cards or vehicles.

The bright side to taking the full amount of time to repay your debt is that it seems like Chapter 13 is off your credit report even faster than 7 years. For example, if you are in bankruptcy for 5 years, by the time the process is finished, you'll only have to put up with two more years of it on your credit report, which puts you one step closer to being able to get a home loan, car loan or just boost your credit.

Bankruptcy can help you get out of debt, and Chapter 13 bankruptcy is off your credit report after only 7 years. If you would like to know more about the process, or if you need a consultation for your bankruptcy needs, contact us at Charles J Schneider PC today.

Benefits of Bankruptcy When You Face a Tough Financial Situation

Tue, 14 Jan 2020 19:42:59 GMT

Like any financial or legal maneuver, bankruptcy is useful in certain situations. If you're in tough financial straits, here are some benefits that filing for bankruptcy offers.

Stop Creditors' Collections Calls

Phone calls from creditors who want to collect on an outstanding debt that you owe can quickly become annoying, as creditors frequently call multiple times a day. Unless you submit a written cease and desist letter, creditors are legally allowed to call you so long as they don't cause your phone to ring continuously in order to annoy you. They are legally allowed to call:

You multiple times per week or day
You anytime between 8:00 a.m. and 9:00 p.m.
Your home or cell phone
Your place of work
Your relatives (to get your contact information only)

One of the first things you'll notice when you file bankruptcy is that all of these phone calls immediately stop. As soon as creditors find out you've taken debts to bankruptcy court, creditors are legally required to cease all collections attempts. They also have little incentive to call you illegally, as all of your finances are now overseen by the court.

In stopping all collectors' phone calls, bankruptcy can bring some peace even before the process is completely over. You'll be able to sleep during the day better if you work second or third shifts, and children won't be woken up during naptime. You'll also have an easier time concentrating at work since you don't need to worry about an interruption from a collector's call.

Delay Foreclosure and Repossession

If your past-due debts include a home mortgage or car loan, you may soon face foreclosure on your house or repossession of your car.

Both of these are devastating, for they not only have significant financial effects but make even the basic things like lodging and transportation a challenge. When you're struggling to pay bills, the last thing you want is to spend time searching for new housing or not have transportation to get to work in an immediate emergency situation.

Should you file chapter 13 bankruptcy, the bankruptcy will immediately halt any foreclosure or repossession that's in process the moment you file. Any creditor who has started one of these processes legally can't take your property for a past-due credit while your bankruptcy is underway.

Even if you ultimately do need to sell your home or car, any delay in foreclosure or repossession can prove valuable. You don't have to immediately surrender your home or car, which gives you more time to find alternative lodging or transportation as you're able to. You also may be able to sell your home or car for more than the bank would give you for the asset.

Protect Your Most Important Assets

Bankruptcy laws govern what assets are used to pay off your debts with, and the laws allow you to protect certain, particularly important assets. While laws vary from state to state, you usually can exempt the following items:

Inexpensive vehicle
Primary residence
Clothes
Retirement accounts
Burial plots

Whatever the law where you file allows you to exempt is stuff that you don't have to sell or hand over to the trustee of your bankruptcy case.

An attorney can explain exactly what your state allows you to exempt, and they can review your possessions to make sure they aren't inordinately valuable. Items that are extremely valuable might not fully qualify for an exemption even if an inexpensive version is allowed. For example, you might be able to keep a $10,000 car but not an $85,000 one.

If you need to file bankruptcy and want help with debt relief, contact Charles J Schneider PC.

Thinking About Bankruptcy? Avoid Intentional or Accidental Bankruptcy Fraud

Mon, 13 Jan 2020 19:50:50 GMT

Bankruptcy protection is a valuable legal tool that can help you restart your life and find financial stability. But to receive this protection, you must also be prepared to abide by its rules. These rules prohibit any type of fraud, of course.

But how can you be sure you don't accidentally fall afoul of fraud while preparing for your own case? Here are a few things to avoid both while you're contemplating bankruptcy and as you prepare to file.

What Not to Do Before Committing to Bankruptcy

If you are seriously considering bankruptcy due to an overwhelming debt situation, you should begin thinking ahead. The court will expect that you have acted in good faith to be fair to debtors and the law within your circumstances leading up to bankruptcy. Actions that appear to have been made with the intention of skirting the rules or taking advantage of bankruptcy protection could lead to legal trouble.

What is considered a failure to act in good faith? This could include gifting property — commonly things like cars, vacation property, boats or outdoor toys, and even bank accounts — to loved ones or friends so that the court cannot force you to use it to satisfy debts. Remember that the court will look backward at your finances and may question any transaction in the months or years leading up to the filing date.

In addition, taking on credit without the intention to pay it off is failure to act in good faith. If you run up new debt during the time leading to bankruptcy without any corresponding reason, the court could consider it presumptive fraud. This is exacerbated by attempts to use false information to open accounts, transfer debts, or manipulate business or salary information. Keep your credit use in harmony with your needs.

What Not to Do While Working on Your Case

Once you start preparing paperwork for the bankruptcy court, avoid any temptation to falsify documents pertaining to your finances, assets, or debts. One common way that bankruptcy fraud happens is when the person fails to list an asset that could be used to satisfy debts. Sometimes this happens by accident, but even an error could affect the appearance of your petition before the judge.

Do not destroy any records of your assets, transactions, or expenses — even if you feel that they might hinder your case or that it would be unfair. Most asset transactions are more easily verified through outside research than you might think. Similarly, attempting to lock out any creditors through false or misleading statements will also harm your case, as the court and creditors will be thorough.

Go over all bankruptcy documents with your attorney to ensure that you have answered all questions as honestly as possible. Try not to leave questions unanswered, since this will heighten suspicion. There may be extenuating circumstances for some unusual transactions — such as inheriting money that was then dispersed in accord with the deceased person's wishes — so prepare explanations in advance.

Where to Get Help With a Future Case

Your actions while preparing to request bankruptcy relief have a bearing on whether you get that relief. Keeping this in mind will put you in a better place to get the maximum legal assistance you deserve. An attorney will be a great ally even if you haven't fully decided on bankruptcy yet. They can help guide you on how to continue acting in good faith and preparing a compelling case for bankruptcy.

Attorney Charles J Schneider PC can help you assess any financial or personal move to determine its effect on your case. Call today to make an appointment and evaluate your pre-bankruptcy situation.

The Endgame — 4 Key Elements of Exiting Your Bankruptcy

Sun, 08 Dec 2019 19:58:11 GMT

The beginning of any bankruptcy petition is one chapter on your journey toward a freer, more stable, and less stressful financial life. But the end of that legal case is a whole different matter. This is a fresh start, a clean slate upon which you can now begin to write your future.

So, what can you expect as you finish your bankruptcy filing? Here are four key aspects to look forward to and to prepare for.

1. The Discharge Letter

The discharge letter is what most people would think of as the end goal of the bankruptcy. It is the legal statement ordering creditors to cancel your debt and briefly discussing your rights under this legal protection. The letter doesn't list all the debts individually, but it does include enough information that most debtors will understand what action to take.

The court sends your discharge letter to all relevant parties, including your creditors, but you should also keep a copy handy in case you need to refer to it. This is an easy document to provide when necessary, and it includes the relevant case number and discharge date.

2. The Final Decree

While it's probably the most vital part of the petition to you, the discharge letter isn't actually the end of the case. The final decree is what truly closes your case. After the court issues your discharge, they send a copy to the trustee. The trustee will then file with the judge to close the case itself. This closure will most likely be the final step for you in court.

Nothing is completely certain until the bankruptcy court issues a final decree. This often happens without further delay, but there are sometimes legal objections raised that prolong the ending. A creditor, for instance, might object to their debt being included in the forgiveness or the court may need to pursue legal channels to free up an asset for your case.

3. Re-Opening the Case

The court does retain the right to re-open your case if a need arises during a set time frame (usually one year). If someone discovers something new that could affect your case — such as a financial asset that you could use to satisfy more of the debt — the judge may need to delve back into the case. If this happens, work closely with your attorney and cooperate with the court for the quickest resolution.

4. Your Future Defense

Unfortunately, a person who found legal relief through bankruptcy may still face future questions. Unscrupulous debt collectors may attempt to force you to pay a debt that was included in the bankruptcy filing. A collector who has purchased debt from other organizations may claim not to be aware of the bankruptcy discharge. And errors might cause a debt to appear as current in certain documents, such as your credit report.

Because of these possibilities, maintain diligence about your credit and your obligations. Talk to your attorney about how to use the discharge letter to ward off illegal attempts to collect. Keep your bankruptcy legal team on your side in case you need more professional help countering an old debt claim. And check your credit history as well as all accounts regularly to look for trouble.

When you know what to expect as you emerge from bankruptcy, you can navigate the process with more confidence and certainty. And that bright future is what bankruptcy protection is all about restoring to your life. For more answers, contact the legal professionals at Charles J Schneider PC today. Let us help you understand your particular case and how it can be resolved quickly and satisfactorily.

2 Common Kinds of Personal Bankruptcy

Sun, 08 Dec 2019 19:54:47 GMT

If you're in an impossible financial position, there are two different classifications of bankruptcy that you might file for. Each of these options has its purpose. Here's a guide to help you choose between Chapter 7 and Chapter 13 bankruptcy.

Chapter 7: Discharge All Your Debts

Chapter 7 bankruptcy is by far the most common form of personal bankruptcy, and it accounts for more than three-fourths of all cases. It's also what many people think of when they consider bankruptcy, as most outstanding debts are dissolved.

In order to file for Chapter 7 bankruptcy, you'll need to go through credit counseling and meet an income requirement. Your income can't be greater than the median income for your state and family's size. In 2019, median incomes for a one-person household in Michigan was $52,168. The median four-person household income was $91,968.

Should you qualify for and file Chapter 7 bankruptcy, all of your assets that aren't necessary for modern life will have to be sold off. You can generally keep vehicles, jewelry, household items, and professional tools — all up to a certain value — and you can also keep a portion of any equity you have in your home.

All non-exempt assets, however, must be sold in order to pay off your outstanding debts. The court will determine exactly what's non-exempt in your case, and the court will also determine how any proceeds from these assets are distributed to creditors. After the assets are sold off and distributed, your outstanding debts are dismissed and you pay nothing more.

Chapter 7 is the most widely used form of personal bankruptcy because it completely frees you from debts that you can't repay. There's no more obligation once your assets are sold and distributed, and you can have debts discharged within 3 months. So long as you qualify and don't have assets you want to protect, this option probably makes the most sense.

Chapter 13: Repay Some of Your Debts

Chapter 13 bankruptcy is used by about one-fifth of individuals who file for bankruptcy. To file for this type of bankruptcy, you must own less than $383,175 in unsecured debt and less than $1,149,525 in secured debts. For most people, these requirements aren't a problem.

In Chapter 13 bankruptcy, the court doesn't fully dissolve your debts but instead restructures them. Some loans may be reduced and repayment plans might be extended, but you still have to pay back a portion of what you owe. Once the court creates a new repayment plan, you have to follow it exactly or else you could lose the bankruptcy's protections.

If you don't qualify for a Chapter 7 bankruptcy, this might be the next-best option. Additionally, sometimes people opt for a Chapter 13 even if they qualify for Chapter 7 so that they can protect an asset.

If you want to make sure you keep your house or a valuable heirloom, for example, you might need to go with this option. Chapter 7 only allows you to protect so much of your home, but with a Chapter 13, you can likely keep your home regardless of equity so long as you follow the repayment plan. You could also shield an expensive car with sentimental value if you wanted.

Deciding which type of bankruptcy to file for is the first step to take if you need to file, and it's an important step, as it determines what your protections and obligations will be throughout the process. If you need help determining whether a Chapter 7 or Chapter 13 bankruptcy makes more sense in your situation, contact Charles J. Schneider PC.

4 Reasons to Discuss Your Bankruptcy With Business Partners

Thu, 24 Oct 2019 20:01:42 GMT

Are you a small business partner considering declaring personal bankruptcy? Undoubtedly, this is a challenging time for you. The relief that comes from completing a bankruptcy will benefit your finances and your stress level. But the road to get there can be difficult. And for a small business owner, these challenges are complicated by the company assets as well as the partnerships involved.

For many in your situation, the question of whether or not to tell business partners your personal financial situation is a difficult one to answer. While you are not legally compelled to tell partners about a personal bankruptcy in most cases, you might still find several good reasons to share the information. Here are four of the most important ones.

1. It Shows Transparency

Because you're in business with others, a certain level of trust generally must be inherent in the relationship. Hiding something as large as a personal bankruptcy may be taken as a sign that you aren't open with your partners. While that may not legally affect your business, it does harm the relationship you've developed and creates interpersonal problems that reverberate throughout the company.

Instead of hiding this issue, keep your partners in the loop about ways it may affect them. You don't need to tell them your entire story or share details that should be kept private, of course. How much to share and how much not to share is up to each person pursuing debt relief. But do spend time coming up with a plan as a group to handle any public relations or financial impacts.

2. Creditors May Pursue Partners

Many loans and credit extensions to partnerships often include the phrase “individually and severally liable.” This legal term means that if one person doesn't pay, the other guarantors are liable for the full amount — even if you only own a small stake in the partnership. Creditors, in other words, may come after your partners for payment.

One big difference between personal and business bankruptcy is the discharge of debts. Generally, what remains of personal unsecured debts after estate liquidation are discharged. Business debts are much harder to discharge, so you and your partners cannot assume that any partnership obligations will be eliminated.

3. The Court Will Be Involved in the Business

Your interest in the partnership (or corporation) is an asset that the court can consider for seizure to pay debts. Do you have significant capital invested in the company? If so, the court may deem it available to be sold and used to pay debts during a Chapter 7 bankruptcy. Or the bankruptcy trustee could become a sort of business partner by controlling your portion of the assets.

Even if you don't have much capital, if you get a salary for services to the partnership, the court can become involved. Guaranteed payments, paychecks, and other benefits are likely to be included in calculations for your Chapter 13 debt repayment plan. This might involve the court in your affairs for up to five years.

4. Guaranteed Debts May Become Due

If your partnership has any debts that were personally guaranteed by a partner who later declares bankruptcy, those debts may become immediately due and payable. This sudden shift can easily put the business and other partners in a bind.

Triggering something this drastic might even cause others to need to seek debt relief of their own. So, you and your partners discuss how to forestall problems in advance.

These are just a few of the ways that your partnership could be affected when you decide to seek bankruptcy relief. However, none of these challenges is insurmountable. By working together as professionals, you and your partners can make a plan to mitigate any negative effects.

As a group, your greatest asset will be an experienced bankruptcy attorney. You may even want to meet with one together. At Charles J Schneider PC , our legal team is ready to help with whatever you need during this difficult but important time. Call today to make an appointment.

What Is A Garnishment And What Can You Do About It?

Mon, 14 Oct 2019 20:11:53 GMT

To those who have never struggled with debt crises, a garnishment may sound like a foreign term. But if you have received a garnishment order, your best defense is to understand how it works and what your next step should be. Here are a few answers to help you do just that.

What is a Garnishment?

A garnishment is a court order to seize particular assets of a debtor in order to fulfill their debt, and in this case, the asset is money. To get their money through a garnishment, a creditor must have exhausted normal channels to get payment. Then, they must go to court to sue for the money and finally to actually get the garnishment order itself.

Garnishments generally come in two basic varieties: against wages and against accounts.

How Do Garnishments Work?

The way a garnishment is handled depends on which type it is.

Wage garnishments are orders to your employer to withhold a percentage of after-tax income from your paychecks until the order is lifted or completed. Once your employer receives one, they must respond immediately and give you information detailing the order and your options. Depending on the timing of your next paycheck, you may have time to talk to the creditor before the garnishment is actually carried out.

An account garnishment to seize and remit money from your bank account moves much faster. You are unlikely to receive notification from the bank before the account is frozen, in order to prevent you from simply clearing out the account.

Once it is frozen, you won't be able to do any transactions, including payments that haven't cleared the account yet. The bank will then determine what are exempted funds and what are not.

What Can You Do About a Garnishment?

If your employer or financial institution has notified you of a garnishment order received, your options as a debtor are very limited. The employer or bank does not legally have the choice to simply ignore the order or to fail to follow its requirements no matter how they feel about you or your financial situation.

Whoever received the garnishment order, though, does have to calculate any withheld money according to the rules of the order. Under state and federal rules, certain monies are considered exempt from garnishment in order to provide you with the means to live.

This often includes government benefits, Social Security, and a percentage of your take-home income. Protect yourself by familiarizing yourself with these rules.

Any attempts to end the garnishment will have to be done with the creditor rather than the institution. You may be able to negotiate with the creditor, although this is very difficult if they are able to successfully garnish your wages or accounts.

What Should Be Your Next Move?

Since there are many things you cannot do on your own to end a garnishment, you should consult with an experienced attorney who handles garnishments and bankruptcy or debt issues. They will start by ensuring that any existing garnishments are being handled legally and properly so you don't lose money unnecessarily.

The best bet for stopping a garnishment and protecting your ability to pay for daily expenses is to pursue bankruptcy as soon as possible. If your debt emergency has grown to the extent that you are being garnished, you are likely to find that bankruptcy is not only the financially sound option but also the best way to find emotional relief from this burden.

Attorney Charles J Schneider PC can help. Our professional team will help you find the best alternatives, stop harassment from creditors, and get relief from garnishments. Call today to make an appointment and start moving forward.

How to Best Time Bankruptcy and Your Divorce

Tue, 10 Sep 2019 20:15:06 GMT

Bankruptcy and divorce are two of the most stressful events many people face in life. What happens when they appear to be occurring at the same time? Should you file for bankruptcy at the same time as your divorce? Before it starts? After it's complete?

To help you make the best choice in this difficult time, here are a few questions to help you decide on the right timeline.

Is Your Problem Debt Joint?

Marital debts and assets get intermingled during the course of a relationship, so this can complicate bankruptcy filings. If you or your spouse's debt is largely individual debt - taken out in one person's name or brought into the marriage - the other party may not get much debt relief. And joint assets of a still married couple could become an issue in the spouse's debt repayment plan.

If the debt is jointly owed, ridding yourselves of it before a divorce can make the divorce easier and less emotionally fraught. The bankruptcy proceedings will likely address debts and asset division, settling these matters before they become a problem during the divorce. It may even save time and money when you pay for divorce attorneys.

What is the Emotional Cost?

The decision about how to time your bankruptcy and divorce is not solely a matter of finances and logic. You may have good personal reasons to choose a particular timing.

If you and your spouse are being harassed by debt collectors or your housing is threatened, for instance, you may need to accelerate debt relief right now - regardless of whether it's a good time or not. And since divorce can be a very trying time, getting a bankruptcy case out of the way and finding freedom from crushing debt might be the emotional boost you need.

On the other hand, those in an unhappy situation may find that dealing with an abusive or emotionally charged spouse during debt proceedings is more trouble than it's worth. If the bankruptcy process will take time - especially with Chapter 13 bankruptcy - you may want to wait and handle it as a single person.

What is Your Post-Divorce Income?

One of the biggest factors when it comes to deciding between filing as a couple or as single individuals is how your income calculations will be affected. Bankruptcy repayment plans and asset liquidation is based on what you have that's worth value and what you earn at the time you file.

A married couple with two incomes and significant assets might look like they can pay a large amount to creditors during bankruptcy. They may not even qualify for certain provisions in the bankruptcy code. However, those same two people with one income each and divided assets could be subject to lower payments or receive more forgiveness.

What is Your Budget?

Bankruptcy proceedings are not free, so you should also consider your budget for the process. If you file as a couple, you will likely only have to pay one set of costs for the filings, documentation, and legal representation. If you're on a tight budget - which many people facing bankruptcy are - you could save significant amounts of money filing together.

Which of these questions is the most urgent in your circumstances? There is no right or wrong answer as to how to time a bankruptcy and a divorce. Only you can decide.

But, whatever you choose, your best source of advice is an experienced bankruptcy attorney. At Charles J Schneider PC , our legal professionals can help you find the right times to manage both a divorce and a bankruptcy filing. Call today to make an appointment.

How Does Personal Bankruptcy Affect Your Business? 3 Valuable Answers

Wed, 07 Aug 2019 20:18:44 GMT

Do you own a small business but are considering personal bankruptcy? To declare bankruptcy is often a complicated and emotionally challenging step, and when business assets are involved, it becomes even more so.

What should you know as a business owner before declaring bankruptcy? Consider these answers to a few of the most pressing questions.

Will Personal Bankruptcy Affect Your Business?

The short answer to this questions is, yes. However, the extent that business assets are involved in an individual's bankruptcy depends on many things.

First, the effects depend on your business structure. If you are a sole proprietor, you are essentially the business itself. This union means that if you declare personal bankruptcy, business assets can generally be used to satisfy your personal debts. If your business is a partnership or corporation, the assets available for liquidation or reorganization are limited to the interest you have in the business.

The second primary consideration for businesses is whether or not the business has assets that can be liquidated. A construction company may have many high-value pieces of equipment that the trustee can use to satisfy debtors. However, a singing group or massage therapist may not have physical assets worth much money. And some assets, such as goodwill or mineral rights, may be hard to liquidate.

Your interest in a business may also be an asset that the trustee can tap into in order to pay creditors. This is more likely to be the case if the business doesn't depend on your personal service and can function even if you are not an owner or investor.

Can You Keep Your Business?

Each business owner contemplating bankruptcy has to decide if they want to — or are able to — continue to operate the business after bankruptcy. If your debt stemmed from an unsuccessful business or if you feel that you need to focus on other matters right now, you may choose to file in a way that allows the business itself to be completely liquidated. For a sole proprietor, filing Chapter 7 liquidation can generally accomplish the whole task since both individual and company are one legal entity.

However, if your debt doesn't stem from the business or if you know you can rebuild the business, you often don't have to give up that company when filing personal bankruptcy. A sole proprietor may opt for Chapter 13 reorganization that provides a timeline for debt payoff rather than forcing liquidation. The trustee will oversee the process, allowing you to focus on income and revenue.

Should Your Business Declare Bankruptcy?

If your debt does involve a corporation or partnership, you need to decide on one final step: business bankruptcy. As a separate legal entity, the business would have to seek its own debt relief — generally through Chapter 7 (liquidation) or Chapter 11 (reorganization). The choice would largely depend on whether you (and any partners) feel that you can turn things around and whether your creditors agree.

You also do not have to seek the same type of bankruptcy for the business as you do for yourself. You may choose liquidation to get full relief from personal debts while using Chapter 11 to eventually pay off business debts through revenue. In fact, owners of incorporated businesses could declare business bankruptcy without declaring personal bankruptcy at all.

Do you have other questions related to your business and the idea of personal bankruptcy? Start by consulting with an experienced bankruptcy attorney to learn more about your particular situation and your best options. At Charles J. Schneider, PC , our certified consumer bankruptcy specialists are ready to help. Call today to make an appointment

Battling Debt? The High Risks of Debt Negotiation and Settlement

Sun, 07 Jul 2019 20:22:59 GMT

If you struggle with debts, many companies attempt to sell their services as a solution to your financial difficulties. Chief among these are debt settlement or debt negotiation companies. These companies offer to convince unsecured creditors to accept as full payment a mere fraction of the amount you owe.

The problem for many is that this method of trying to deal with debt has many downsides. What are some of the biggest risks? And how can you make smart choices instead? Here are a few answers.

The Credit Risks of Settlement

Debt negotiation largely depends on the practice of piling up money in an account. When the account is sufficiently high, that money can help to try negotiate with each creditor for a lump sum payment considered paid in full. While filling this account, you are often advised to stop paying the creditors.

While this method may eventually make companies more willing to negotiate, this also may severely affect your credit rating. Even after debts are settled, bad credit will often follow you for years. You will likely find it hard to get new credit, you'll often have to pay higher rates, and you may be denied such things as rental opportunities.

The Tax Risks of Settlement

When you have cancelled or forgiven debts, you do still have a bill when all is said and done. What type of bill is this? A tax bill. Any business that writes off a portion or all of a debt - more than $600 - generally sends you a Form 1099-C at tax time. The amount forgiven is considered taxable income.

Since those with serious debt issues are likely to have thousands of dollars written off, the tax ramifications can eat into a refund or even cause a balance due. And income taxes are much harder to discharge than most other forms of debt.

The Legal Risks of Settlement

Taking the time to build up a stash of money and failing to pay down your debts creates a high chance that creditors will take legal steps. Those legal steps may include notices and phone calls leading eventually to being sued for the amount owed. If you lose in civil court, your wages, Social Security, or bank accounts could be seized to pay creditors.

The Financial Risks of Settlement

While you build up the financial foundation for negotiating with creditors, debts continue to accumulate. Not paying on any debt generally means that the principal will never go down, interest will continue to accrue (often at a higher rate once you develop a bad history), and other fees may be assessed. In addition, settlement companies often charge high fees for their services.

If you can successfully negotiate a smaller lump sum, most added costs may not be a huge issue. But creditors are not required to negotiate, and some won't do so - particularly if a debt settlement company is involved. If the plan fails, you are left with the consequences.

Find Better Options

If the downsides to potentially settling unsecured debts are enough to put you off, what other choices do you have? Legal assistance can help you negotiate on your own with creditors without ruining your credit. You may also benefit from debt consolidation or financial counseling services.

One of the oldest and most viable methods for resolving serious financial challenges is bankruptcy. Once you file for bankruptcy, collection efforts stop - including legal action. Many unsecured debts are completely dischargeable, freeing up your monthly budget without losing more money. And bankruptcy means that forgiven debt is not usually taxable income.

At Charles J Schneider PC , our friendly professionals are ready to help you find the right solution to your debt problems. Call today to learn more about bankruptcy as well as other debt relief options.

Can You Keep Your Rental Properties During a Bankruptcy?

Wed, 19 Jun 2019 20:31:43 GMT

During a bankruptcy, your assets are often liquidated to pay off your creditors. But rental properties can make this a little more complicated. You won't necessarily need to get rid of your rental properties during bankruptcy, but it depends on the profitability and equity you hold in the property itself.

There Are Property and Asset Exemptions to Bankruptcy

Don’t assume that you will need to liquidate all of your assets during a bankruptcy. In fact, exemptions include your home, your car, your retirement accounts, and some amount of your personal property. Many people are surprised to find out how much they are allowed to keep during the course of their bankruptcy. And this can even include a rental property.

Rental Properties May Not Have Any Equity

Consider a property that is valued at $200,000 but presently has a $200,000 mortgage. A bankruptcy isn't going to be concerned with this property, because it isn't technically an asset; you owe as much on it as it's worth. Selling it will only pay off the mortgage, it won't pay off any of your additional debts.

So, your rental properties aren't likely to call attention to themselves if you have no equity in them. If you have low equity, they may fall under the asset exemptions: you can keep a certain value of property, depending on the state that you're in.

Rental Properties May Not Be Profitable

Profitability does matter in regard to rental properties. If you're losing a significant amount on your rental properties, they're going to be considered a liability. Since they're considered a liability, your bankruptcy trustee will likely tell you to liquidate these properties before you move forward. This is independent of the property's value: the trustee's goal is to ensure that you can pay off your debts.

Thus, if your rental property currently costs more to maintain than it brings in, you may need to consider selling the property. However, if your rental property is breaking even, and you don't hold much equity in it, you may be able to keep it.

Chapter 13 Bankruptcy Doesn't Liquidate Your Assets

Consider also that only Chapter 7 bankruptcy liquidates your assets. Chapter 13 bankruptcy instead negotiates a payment plan for you, so you can pay off your debts over time. If you are able to pay off your debts in this way, it may be the best solution.

Chapter 13 bankruptcy is unlikely to impact your rental properties, unless you cannot pay for those properties. If you can't pay for those properties, you may be better off doing a Chapter 7 bankruptcy.

You May Be Asked to Re-Affirm Your Debt

When you keep a home, car, or other type of property during a bankruptcy, you are often asked to reaffirm that debt. Reaffirming the debt means that you sign the paperwork again following the bankruptcy, and the lender isn't required or guaranteed to allow this.

That means that even if you are allowed to keep a rental property, the mortgage may not be reaffirmed. Creditors may not want to maintain the mortgage if they feel that you may be in dire financial trouble, and your credit score is likely to have gone down.

However, you can sidestep issues caused by this by working with your lender in advance. Your lender will be able to tell you whether they're willing to continue working with you, or even whether they may be able to restructure your debt to be cheaper.

Bankruptcy is complicated. There are a lot of factors to consider, and everyone's financial situation is unique. To find out more, contact Charles J. Schneider, PC , today.

Bad Habits Can Be Broken: Post-Bankruptcy Financial Tips

Mon, 29 Jan 2018 20:38:48 GMT

Bankruptcy is used by millions of people each year to help get out of debt. This debt could have been from an unexpected emergency, such as a medical problem or loss of a job, or it could have been accumulated over time from poor spending habits. You should use bankruptcy as a means to get out of debt, not as debt relief every couple of years. Bad habits can be difficult to break but not impossible. See below for some helpful tips to building your credit and staying on budget after bankruptcy.

Open A Savings Account

If you didn't already have a savings account, now is the time to open one up. Check with your local banks or credit unions for the best interest rates on savings accounts. Also, look into a money market account, which may offer a higher interest rate but will require a higher deposit or balance to be kept in the account. A savings account should be kept in case of emergencies. You should have enough money in the account to cover a few months’ worth of your expenses. This way if an emergency comes up, you have the money to cover it and won't have to get a loan or use a credit card to get by. To help you save money, have the money automatically deposited into the savings account from your paycheck, or you can use an automatic transfer set up through your bank. You can also use short-term goals to help you save money, such as getting to a specific dollar amount in three months’ time.

List Your Monthly Expenses

Write out all of your monthly expenses. Even after bankruptcy, you still have monthly expenses, such as food/necessities, gas, cable, water/sewer, electric/gas, and mortgage/rent. Record any other expenses from assets you kept from the bankruptcy. List out all of your expenses and keep track of what is owed, how much the payment is, and when it is due. Make a plan for when you will be paying these expenses so you don't miss anything throughout the month.

Keep Track Of Your Income

Also, be sure to list your income (all means of income). Subtract the expenses from the income, and this is what you have leftover at the end of the month. The excess should be placed into a savings account; it should not be spent. The extra you have leftover in your account can also be used to pay down any debts you still owe to pay it down much faster.

Open A Credit Card Account

After bankruptcy, you may steer clear of credit card applications, but applying for one is actually a good thing. You don't have the greatest credit after filing for bankruptcy, but a new credit card that you keep paid off will help increase your credit score. Look for a credit card that offers the lowest interest rate, and apply for it. The interest rate may be on the high side, but it may drop over time. Make small purchases for things you would use every day that you can pay off quickly, such as groceries and gas. Pay off the debt as soon as the bill comes in or before interest accrues. This habit will show that you can pay off your purchases and have a credit card with a zero balance, which is great for your credit rating. Whether bad habits or an emergency is the reason for your bankruptcy filing, you can regain your financial foothold by following the tips above after your bankruptcy. Make an appointment today with Charles J. Schneider, PC for help with your bankruptcy filing and for information about life after bankruptcy.

Bankruptcy Mistakes

Wed, 13 Dec 2017 20:54:19 GMT

If you decide to file for bankruptcy to help you regain control of your finances, there are certain mistakes you should avoid making before you file. Making these mistakes could impact your ability to file or cause the court to dismiss your case. Here are some of the top mistakes you should avoid making if you want to file for bankruptcy.

Racking Up New Debt

When a person knows they will file for bankruptcy soon, they might be tempted to go on a spending spree with their credit cards. This is a huge mistake to make prior to filing for bankruptcy because the court may view this as fraud. When the court suspects fraud in a bankruptcy case, they take it very seriously. In fact, when a person commits fraud in bankruptcy, the court will dismiss the case and the person might suffer legal consequences.

Hiding Your Assets

Another mistake people make when filing for bankruptcy involves hiding their assets. When you use Chapter 7 bankruptcy for debt relief, you risk losing assets. Most people fully understand this and will choose to hide certain assets to prevent this from happening. If you are tempted to do this, keep in mind that this is also fraud. You cannot hide assets from the bankruptcy court. It is always better to reveal all your assets and take the risk of losing them, rather than hiding them and risking that the court will find out. Additionally, you cannot give away assets you own prior to filing simply to avoid losing the assets. This is another action the court views as fraud.

Lying About A Windfall Of Cash

When you file for bankruptcy, your lawyer might also ask you questions about cash windfalls you received recently or expect to receive. For example, if you are involved in a class-action lawsuit that you expect to receive money from, you must tell your lawyer and the bankruptcy court. While you risk losing the money from the lawsuit to your bankruptcy estate, lying about it has serious consequences because the court also views this as fraud.

Filing Under The Wrong Branch

One of the main mistakes people make when filing for bankruptcy is utilizing the wrong chapter. In bankruptcy, the court offers two main types: Chapter 7 and Chapter 13. There are situations where Chapter 7 is better for a person, but there are other situations where Chapter 13 is the better choice. If you do not fully research your unique situation and both branches of bankruptcy, then you might choose the wrong branch. If this happens, you might not benefit from filing for bankruptcy as much as you could have if you had filed with the other chapter.

Filing At The Wrong Time

The other common mistake people make is filing for bankruptcy at the wrong time. Timing is extremely valuable in bankruptcy cases. Talking to a lawyer is the best way to find out how to time your filing in the best manner possible. For example, if you file for bankruptcy right after receiving an inheritance, you might lose the money you received from the inheritance. If you wait six months after receiving the inheritance money, you might not have to surrender this money to the court. There are a number of other timing issues your lawyer will talk to you about to help you decide when to file. Before you decide to file for bankruptcy, you should meet with a bankruptcy lawyer to discuss your personal situation. Contact Charles J. Schneider, P.C. to schedule a consultation. We can help you determine if bankruptcy is right for you.