Welcome to Ann Arbor Legal Line!

Call the 24/7 free Legal Line:

877-378-3525

Looking for an Ann Arbor bankruptcy attorney?  We may be able to help.   Keep in mind, there's no hard and fast rule as to when to consider bankruptcy as a viable alternative.  It might be the case, though, if you:

• Can only make minimum payments on credit cards (or can't even do that)
• Don’t see a way to lay out a budget that will get you out of debt in five years
• Are getting foreclosure notices on your Ann Arbor home loan, car note or other loans?
• Have had a major financial setback like divorce, job loss or death of a spouse?
• There are two general types of bankruptcy filings. 

Ann Arbor CHAPTER 7 BANKRUPTCY

By far the most common sort of bankruptcy filing for individuals or couples, Chapter 7 is liquidation where the court appoints a trustee to sell your non-exempt property and sell it to pay creditors.  Most Chapter 7's, however, are "no-asset" cases, meaning that there is nothing for the trustee to seize and sell.  Changes in Federal law in 2005 provided for a "means test," determining your eligibility for Chapter 7; if your income falls below the median income for families in the state of Michigan, you will be considered eligible.  If your income is over the median for the state, your income figures for the last six months will be taken into account along with mortgage, car payments, back taxes, child support and school expenses (up to $1650/year).  If, after factoring these in, you can pay at least $100/month to unsecured creditors for five years, you will not qualify for Chapter 7. If that's the case, your only option will be a Chapter 13 filing.

In Michigan, at the time of this writing the median income for a single wage-earner is $44,703; for a family of two, $53,575; for three, $63,339; for four, $76,312.  The 2005 revisions also call for mandatory credit counseling before filing and filing any overdue tax returns within weeks after the bankruptcy goes through. 

The Chapter 7 process begins with a filing of the official petition, and a statement of financial affairs with the bankruptcy court.  These will include a complete list of all creditors and their claims, the source and amount of your income, a complete list of property and a detailed list of monthly living expenses.  The filing fee in Michigan is $299 ($245 for the filing, $39 for administrative and $15 for a trustee surcharge).  An automatic stay will be in place as soon as the filing is complete, giving you a break from litigation and collection proceedings.  Creditors then have to show there is "cause" for continued collection proceedings during the bankruptcy process. 

The trustee will take control of any property you are not allowed to keep, sell the property and pay out to the creditors and administrative costs of the case.  Within the first 20 to 40 days after the petition, the trustee will hold the "341 meeting" (also the "first meeting of creditors") in which you will be asked under oath about property and debts.  Creditors can air out their concerns (and have 60 additional days to prove why you shouldn't be allowed to jettison your debts).  Your attendance is mandatory for the 341 meeting, but you will mainly just be expected to cooperate with the trustee and his questions.

Remember that Chapter 7 does NOT address car notes, mortgages, tax liens or tax debt.  You can still lose your house or car after a Chapter 7 if you fall behind on payments.  On a car note, you are required to reaffirm the debt with the lender within 30 days of the 341 meeting. 

Ann Arbor CHAPTER 13 BANKRUPTCY

Chapter 13 bankruptcies are more common to business settings, but as an individual or sole proprietor, you can file Chapter 13 to pay off all or a negotiated part of your debts over a three to five year span. Chapter 13 is reorganization rather than wiping the slate clean.  For individuals, Chapter 13 can be a good alternative if you: 

Chapter 13 will require a stable income with a certain amount of disposable income left over after paying for the bare necessities of food, shelter and utilities.  There can be no more than $1,010,650 in secured debt (which creditors can reclaim if you fall behind on payments) and $335,900 in unsecured debt.  Chapter 13 will require a detailed plan of how you will pay back debt over a three to five year span, and the court's trustee will review and approve that plan for workability and flexibility.  Payments will go directly to the trustee, who then distributes them to creditors.  If you stick with the plan and all debts are paid down, your debts will be considered "discharged" at that time.

For more information on bankruptcy and related issues, contact an Ann Arbor bankruptcy attorney for further consultation.

• I am considering divorce but we are in extreme financial difficulty. I feel I need the advice of an attorney for custody and division of debt issues. I do not feel that I would qualify for assistance. Where can I start?
  
• Here in Ann Arbor court, can you file for bankruptcy without your spouse being present?
  
• I need to file bk, due to excessive debt and foreclosure. I was trying to modify but just found out today that my house was sold at auction. I have not been given an eviction notice yet. By filing ch7, can I stay in the house a little longer to save up money to move out? I need to do something asap. Can you help us?
  
• What would be the ramifications of letting our boat go back to the bank? How would this affect our credit rating? Would there have to be an additional settlement with the local bank?
  
• If I owe a credit card company money . . . and I send them a check for less money than what they say I owe them, and I write payment in full in the memo line, and they cash or deposit the check . . . is this considered a legally binding contract or could they still continue to bill me or send me a Form 1099C for the difference?
• I have a $12,000 debt on one credit card. It has gone to an Ann Arbor collections company, where they added fees, bringing it to $17,000. I now have money to negotiate the payoff amount, pay it, and repair my credit. I will not pay $17,000. Please advise.
  
  

   

*Always consult a legal professional in person before taking any legal action related to your case or situation.