Frequently Asked Bankruptcy Questions

You’d be surprised at how many questions a Macomb bankruptcy attorney receives in a week. In order to help you, though, we’re Macomb County Chapter 7 Bankruptcy Attorneyputting our most commonly asked ones here.

Since COVID-19, our office is speaking to clients on the phone, via computer, or in person. Please take advantage of our FREE 1/2 hour initial consultation. Call 586-738-6329 for an appointment, or use our online contact form. Daniela Dimovski or one of her associates will get back to you shortly.

What should I do when I cannot repay my debts?

First, consult an attorney to discuss your options. If you are going to file bankruptcy you should stop using your credit cards.

What is bankruptcy?

Bankruptcy is a federal law that stops collection procedures, stops wage garnishments, stops repossessions, and helps you discharge unsecured debts. It is designed to provide you a fresh start.

What is the difference between Chapter 7 and Chapter 13?

Chapter 7 allows a person to wipe out most of their debt, especially unsecured debt and obtain a fresh start. The entire process usually takes about 4 months from the time you file until the end of your case.

Chapter 13 is a repayment plan that lasts from 3 to 5 years. Chapter 13 is a form of debt consolidation where you pay back secured debts, usually in full, and pay cents on the dollar on your unsecured debts. An attorney creates a Chapter 13 plan which requires you to make a monthly payment to the Trustee and then the Trustee pays your creditors for you each month.

What are the advantages?

Your creditors cannot continue to collect on the debt. This means they cannot telephone you about past due payments, begin or continue a lawsuit or begin or continue garnishments.

What are the disadvantages?

The fact you filed bankruptcy will stay on your credit report for a period of ten years. Many people are able to obtain credit, even mortgages within that ten-year period.

How is a bankruptcy started?

You will meet with the attorney and fill out the forms. You will provide your attorney with the information he or she will use to prepare the bankruptcy forms.

Does my spouse have to file?

No. If debts are in one spouse’s name only then there is no need for the other spouse to file. However, if you have joint debts, the creditor can collect against the non-filing spouse so it is usually best if you both file. If you are married, the Court will require household income and household expenses even if you file alone.

Will I have to go to court?

Approximately one month after filing you will need to attend a hearing conducted by the bankruptcy trustee. The meeting is called the First Meeting of Creditors. Many creditors do not appear at this meeting, but some may. The trustee and your creditors have an opportunity to ask you questions about your assets, income, expenses, and other matters.

Can you help me via phone?

Under the new bankruptcy law, an attorney is required to provide you with written disclosures regarding bankruptcy laws, therefore an attorney is not able to provide bankruptcy advice on the phone. Please take advantage of our FREE 1/2 hour initial consultation. Call 586-738-6329 for an appointment, or use our online contact form.

Can I keep any credit cards?

In some cases, you may be able to keep some credit cards if the creditor agrees. Some creditors allow you to retain the card and some credit if you reaffirm, or agree to repay the balance at the time of filing.

Can I keep my house and my car in bankruptcy?

You can keep certain assets in bankruptcy. Many individuals find that they can keep all of their property, including their house and their car, and discharge their unsecured debt. Do not transfer your assets to family or friends. The transfer may be considered a fraudulent transfer, and you could lose both the property and your right to a bankruptcy discharge.

What should I do when I cannot repay my debts?

First, consult an attorney to discuss your options. If you are going to file bankruptcy you should stop using your credit cards.

What should I NOT do before filing bankruptcy?

Do not incur new debt. It is best to avoid incurring any new debt once you are considering bankruptcy. Incurring new debt could result in you being required to repay the debt.

Do not repay debts owed to family and friends.

Repayment of debts owed to family and friends within one year prior to filing are considered preference payments. The Trustee can try and recover those payments and distribute them to all of your creditors as everyone gets an equal share in bankruptcy.

Do not transfer property.

Transferring real or personal property before filing bankruptcy can create lots of problems. The court will look at the last 2 years and can even go as far back as 6 years when looking at transfers.

Do not liquidate retirement accounts.

Bankruptcy law typically protects your funds in retirement accounts. However, taking out the funds and converting them to money in your bank account or pocket changes and reduces this protection.

 

Will my landlord and employer find out about the bankruptcy?

Although bankruptcy petitions are public records, under normal circumstances your employer and landlord will not know you filed. If the landlord or employer are creditors you will have to list them in the schedules and they will receive notice of the filing.

What if I received a Notice of Foreclosure?

Many times we are able to prepare a Chapter 13 plan which will allow you time to bring the payments current, and stop the foreclosure. However, the bankruptcy must be filed prior to the foreclosure sale.

Are all debts discharged?

Some debts are not discharged or “forgiven”. Some of these debts are:

  • Child support and alimony
  • Debts for personal injury or death caused by driving while intoxicated
  • Most student loans
  • Fines and penalties incurred for breaking the law, such as traffic tickets and criminal fines and restitution
  • Most tax debts: although some tax debts can be canceled and some can be paid under a Chapter 13 plan
  • Debts incurred by fraud or misrepresentation

What if my question is not answered here?

You can call the Macomb Bankruptcy Attorney at 586-738-6329 and ask to speak to Daniela Dimovski, or use our online contact form to schedule a free initial consultation.

DISCLAIMER:

The information contained on this page is not to be construed as legal advice and does not create an attorney-client relationship. Bankruptcy law is very complicated and you should always consult an attorney before taking any action.