Michigan Bankruptcy Questions

This section is helpful in answering some common bankruptcy questions and possibly some questions you may not have thought of.  While our free initial consultation is often the easiest way to determine if bankruptcy is the best option for you, reading through the FAQ page can assist you in feeling more confident and knowledgeable about the different types of bankruptcy and your options.

What is bankruptcy?

Bankruptcy is a legal proceeding governed under the United States Constitution (Article 1, Section 8 Clause 4). It provides individuals who cannot afford to pay their bills a financial fresh start. Filing bankruptcy will immediately stop garnishments, foreclosures, repossessions, and other collection efforts.

How much does it cost to file bankruptcy?

There are three major cost areas of a bankruptcy filing.
1. The Court Filing Fee: The court filing fee for a Chapter 7 bankruptcy is $335. The court filing fee for a Chapter 13 bankruptcy is $310.
2. Credit Counseling Courses: The bankruptcy code requires all filers to take a credit counseling course prior to the filing of the case and a financial management course after the filing of the case. The credit counseling course is $14.95 and can be done online.  The financial management course is $9.95 and can also be done online.
3. Lawyer Fees: The attorney fees will vary greatly depending on the bankruptcy chapter you file and the complexity of the case. Our flexible payment plan options provide everyone an opportunity to hire an attorney at Detroit Lawyers. We have never turned a client away due to money. Contact our office today to schedule a free initial consultation or request a free quote.

Do I qualify for bankruptcy?

A majority of people will qualify for bankruptcy. The question that needs to be determined is which type of bankruptcy, if any, is best for your unique situation. The experts at Detroit Lawyers will explain all your options to you.

Do I need a lawyer to file or can I file on my own?

You can file on your own. However, the bankruptcy process can be a daunting task to take on by yourself. The bankruptcy code is filled with rules and procedures which must be followed. Without the guidance of an attorney, you may make any number of harmful mistakes which could lead to loss of property or even your case being dismissed.

Is there a charge for the consultation visit?

No, Detroit Lawyers provide Free Consultations. All you need to do is call our office today to schedule an appointment. We are available nights and weekends to meet your busy schedule.

Where Can I Take the Credit Counseling Classes?

We usually recommend debtorcc.org because it’s one of the cheaper ones we’ve found ($14.95). You’re free to use any class you’d like as long as they are approved by  the Court. You can find a list of the agencies that offer the first and second financial class on the Eastern District of Michigan’s website.

Will the bill collectors quit calling me?

Bill collectors should quit calling once you have retained an attorney. Our office can be retained for as little as $100.00. Once a case is filed, the automatic stay prevents creditors from continuing to try to collect on a debt owed. If they do continue to call you, legal sanctions may be imposed on the creditor.

Will filing bankruptcy affect my job?

Under federal law, it is illegal for someone to discriminate against you based on your bankruptcy filing. If you believe you were discriminated against due to a bankruptcy filing, please let our office know immediately.

Are there debts that I can’t get rid of?

Yes, there are some debts that we will not be able to eliminate. These debts are called non-dischargeable debts. Common non-dischargeable debts are domestic support, student loans, and criminal restitution.

Can I keep my house and car?

Yes, it is more likely than not that you will be able to keep your house and car. The bankruptcy code provides for exemptions. These exemptions generally allow people to protect the equity in their home and car. The goal of bankruptcy is to allow people to keep their necessary assets while still getting a fresh start financially.

Will bankruptcy stop wage garnishments?

Yes, filing a bankruptcy will stop wage garnishments. In addition to stopping the garnishment, we may be able to recover the garnished funds for you. If you are getting garnished, it is important to file as soon as possible!

Will bankruptcy stop foreclosures or repossession?

Yes, a bankruptcy will stop foreclosures or repossessions. Once the bankruptcy case is filed, the automatic stay goes into place which prevents creditors from taking any action against you or your property.

After filing bankruptcy do I need to keep paying my house and vehicle payments?

If you want to keep your house and vehicle after filing bankruptcy then you should continue to make monthly payments. Be careful, creditors may stop sending you statements or discontinue your online access out of concern for violating the automatic stay. It will be up to you to mail your house or car payment monthly. These installment payments are a great way to start rebuilding your credit so make sure the payments are on time.

Can utility bills be discharged?

Yes, utility bills may be discharged by filing for bankruptcy. Some utility companies may require a deposit the next time you open an account with them. The small deposit is normally dwarfed by the utility debt that is discharged.

Will bankruptcy stop my utilities from being disconnected?

Yes, filing for bankruptcy will stop your utilities from being disconnected. The automatic stay which goes into place prevents any creditor from taking further action against you or your property – including utilities.

Can bankruptcy help me?

Yes, if you are having trouble paying your bills or making ends meet, then bankruptcy can help you. It is even more important to determine if bankruptcy, or an alternative, is the best option for you.

Can I file without my spouse?

Yes, you can file without your spouse. This is a good idea if there is no joint debt between husband and wife. If only one spouse files and there is no joint debt, the bankruptcy will not have any impact on the non-filing spouse. See Joint Bankruptcy for more information.

Should my spouse and I file a joint bankruptcy?

If you and your spouse have joint debts then it may be a good idea to file a joint bankruptcy. It would not make sense for one spouse to file and leave the other spouse liable on the debt.

Will I lose everything if I file bankruptcy?

No. This is one of the biggest misconceptions. Bankruptcy laws were put into place to provide people who are suffering from financial hardship to get a fresh start. If everything was taken, it would not be much of a fresh start. So, the bankruptcy laws provide exemptions so you may not lose anything.

How will bankruptcy affect my credit?

Bankruptcy will actually improve most people’s credit score. Once you file for bankruptcy and discharge all your debts, your debt to income ratio will improve significantly. However, bankruptcy is just the first step to rebuilding your credit. We provide all our clients with credit repair tools to help them start improving their credit score immediately. And yes, you’ll still be able to use credit cards after bankruptcy.

What’s the difference between chapter 7 & 13?

Chapter 7 bankruptcy , often called “straight bankruptcy”, is a quick and easy way to eliminate your debt. You will receive your chapter 7 bankruptcy discharge approximately 120 days after the filing of the case. You will not have to pay back any of your unsecured creditors.

Chapter 13 bankruptcy in Michigan, often called “reorganization”, allows individuals to set up a payment plan to pay their debts back. The debts are paid to creditors according to a court-approved payment plan. The payment plans can run from 3 – 5 years.

Can I discharge student loans?

No, student loans are typically non-dischargeable. However, a Chapter 13 bankruptcy may reduce your monthly student loan payment. There are also non-bankruptcy options available to help pay your student loans.

Can bankruptcy stop a lawsuit against me?

Yes, once you file a bankruptcy case, the automatic stay goes into place. The automatic stay will stop a lawsuit while the bankruptcy case is ongoing.

Can I file for bankruptcy again?

Well, it depends on a few factors. First, if your prior filing was a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. Second, if you received a discharge in your prior bankruptcy. And third, what chapter bankruptcy you are hoping to file for this time.

See Can I File for BK again for more details.

Why should I use your firm?

At Detroit Lawyers, our attorneys have helped thousands of individuals contemplating filing bankruptcy. Although we have the requisite experience, we know that our attention to customer service is what sets us apart from the rest. We pride ourselves on being available to our clients when they need us. See our attorney bios to find out more about us.

How do I make an appointment?

Call our office at 248.237.7979 or use our online tool to schedule your FREE CONSULTATION.