Can I file for bankruptcy without an attorney?

Posted by & filed under Chapter 13 Bankruptcy, Chapter 7, Michigan Bankruptcy. 

Yes. Bankruptcy without an attorney is possible. We don't recommend it, however, so this article is for information purposes only. Come in and discuss your situation with one of our lawyers even if you plan on filing bankruptcy yourself.

Why file bankruptcy without an attorney?

First things first… yes, you’re able to file Chapter 7 or Chapter 13 bankruptcy in Michigan without needing a lawyer. But why are people googling how to do it without an attorney helping them? Money! People assume they won’t be able to afford a lawyer, so they put off talking to one.

Our consultations are always free. Even if you plan on filing your own bankruptcy it’d be a good idea to come in to talk to one of our Michigan bankruptcy experts. You never know what critical piece of information you could learn that saves your house, car, or credit!

How to file bankruptcy without an attorney

First you’ll need to determine if either Chapter 7 or Chapter 13 bankruptcy is right for you. This is worth the free consultation all by itself. You want to make sure that you’re able to file and that you can protect your assets.

You’ll also want to make sure you know if you’ll pass the “Means Test” before you file a petition with the bankruptcy court. The proper form for the Means Test calculation (along with all other required forms) can be found on the court’s website. Sometimes waiting a month to file a bankruptcy petition can be the difference to passing the Means Test.

Where to file your case

Bankruptcy petitions are filed in Federal Court. We mostly work in the Eastern District of Michigan. If you’re in the Eastern District of Michigan you’ll either be in Detroit, Flint, or Bay City. They also hold some 341 meetings in Ann Arbor.

You’ll usually file a case based on where you lived in the 6 months prior to your bankruptcy. You can find your district by using the US Court Location by selecting “bankruptcy court” from the options.

If you moved in the 180 days before you file bankruptcy then you’ll file in the location where you lived for the majority of those 180 days. Your filing location could also depend on the location of your assets. Since different jurisdictions have different exemptions, it’s critical to know the proper place to file your bankruptcy.

Required credit counseling course

Before you can file for Chapter 7 or Chapter 13 bankruptcy without an attorney you need to complete the required credit counseling course. This law is new since 2005 and is important. While we have agencies that we recommend to our clients, the Department of Justice maintains a list of approved credit counseling agencies. You can take the class from any of the agencies on that list, but it must be done within the 180 days before you filed a case.

The course we suggest is less than $10 and can be taken online in an hour. If you put in our email address we’ll get a copy of your certificate as soon as you complete the course. This eliminates the need for you to have to print it out and bring it in before we can file your case.

Required documents

The documents you’ll need to file a case depend on your situation. The Eastern District of Michigan has a handy Chapter 7 checklist for the different forms you’ll need if you’re filing without a lawyer. Some libraries will have access to computer software that makes filling out all the required forms quicker and easier. The software is expensive; buying it probably costs more than what you’d spend on attorney fees!

After you know the proper forms to file with the court you’ll still need to know which documents you’ll need to send to the trustee for your 341 meeting. You’ll need to have your Drivers License (or ID) and Social Security Card in order to verify your identity. Other common documents you’ll need include your two most recent tax statements, six months of bank statements, six months of paystubs, vehicle titles, and recorded deeds and recorded mortgages to any property you own.

Filing fee

Speaking of fees… you’ll have to pay the Bankruptcy Court in order to file a petition unless you can get it waived. You can also apply to make the payment in installments if you’re unable to come up with the full amount when you file a case. The Chapter 7 filing fee is (as of today) $335 and Chapter 13 is $310. This amount changes from time to time so make sure you’re checking the court’s website for the current fee.

Why you should come talk to us

Without an Attorney - Picture of Eastern Market

Detroit’s Eastern Market | credit: www.davechristiansen.com

Bankruptcy is not a decision to be made lightly. I’ve oversimplified the process so far to give you an idea of where to start and where to go for more information. Making a mistake on your bankruptcy schedules, petition, and forms could be far worse than your current financial situation.

Don’t risk it. Come in for a free consultation so that you can learn what to do/not to do before during and after bankruptcy. We’ll explain how the whole process works and help you decide if bankruptcy is the right choice for you.

Whatever you do, please don’t avoid talking to an attorney because you think you can’t afford it. We offer free consultation as well as easy payment plans. You also may be surprised to hear that we often recover funds for our clients that have recently been garnished from their paycheck or bank account.

Good luck!

Credit Scores and Insurance Rates

Posted by & filed under Credit Score, insurance.

Your Credit Score Affects a Lot More Than Credit

Clients often seek our help with their consumer debt issues.  We help clients with debt related to credit cards, medical bills, foreclosures, garnishments, or repossessions.  Often times we find that their best solution is to file for bankruptcy.  After this determination, the next question is usually, “how will this affect my credit score?” or “will I still be able to get a loan?.”  The short answer is, it depends and yes.

Many of these clients are aware that their credit score impacts the ability to get a loan or credit card.  However, most people do not know that credit scores also impact other areas of their life.  Over the next few blogs I will examine how your credit score affects insurance, renting, employment, and even utilities. Today we will look at the impact of your credit score on your insurance rates.

How may your credit score impact your auto insurance?

Along with your credit score, many U.S. care insurance companies use your driving history, claims history, and other factors to help determine your insurance rates.  The insurance companies believe there is a correlation between your credit score and the risk you present as a driver.  Insurance companies contend that higher credit scores indicate safer drivers and cost insurance companies less money. While I’m not completely sold on that idea, the end result remains that the car companies still use your credit score to help determine the auto insurance rates you are going to be paying.

The credit score that the insurance companies use is a little different than the credit score banks or lenders use when determining your interest rate and whether or not you qualify for a loan.  The credit score that the insurance companies use does not factor in your job, income history, gender or any other personal information.

It’s important to get quotes from multiple providers since insurance companies use their own scores and in different ways.   Don’t forget to look online, and talk to several carriers prior to selecting one.

What if you are denied insurance or your terms are less favorable?

If you are denied insurance, or offered less favorable terms, because of information on your credit report, you still have some rights.  You can request the creditor give you a notice that includes the name, address, and phone number of the credit reporting company that supplied the information.

Other questions to ask include:

  • -If a credit scoring system was used, what factors were used and how can I improve my application?
  • -Why am I not getting the best offer?

Hopefully the answers to these questions will help point you in the right direction. Regardless, the next step is going to be to increase your credit score.

How can I increase my credit score?

There are a number of factors which will influence your credit score.  Some of those factors include: payment history, debts owed, length of credit history, new accounts, and balance of accounts.

One of the most important factors in your credit score is the amount of debt you owe.  This includes the number of debt accounts you currently have, the types of accounts (credit card, installment, collection, etc.), and their balances. It is best to have a few credit cards and open credit accounts with low balances.  In general, using only 30% of the available credit improves your credit score.

Another factor in your credit score is your payment history.  A long record of on-time payments demonstrates an individual who has been reliable for a significant period of time.  It’s vital to your credit score to always pay your bills on time.

Another factor is the length of credit history.  The longer your credit history with a certain account, the better.  These long payment histories can be for houses, vehicles or even credit cards.

Once your credit score improves be sure to contact your insurance company to ask for a rate adjustment or shop around for lower rates from different insurers.

Bottom Line

The bottom line is that your credit score will impact your insurance rates and because Michigan law requires drivers to be insured, your credit score will ultimately impact your monthly expenses.  If you’re looking to save on car insurance make sure to improve your credit score, track your credit report and be proactive responding to inaccurate information.

The Fair Credit Reporting Act (FCRA) gives everyone the right to obtain a free credit report once a year.  I suggest pulling one report from each of the three major credit bureaus (Transunion, Equifax, and Experian) every four months.

Check back next Wednesday to read about how your credit score could impact your current and potential employment…

 

Snow day update

Posted by & filed under Chapter 9, Detroit Bankruptcy, Detroit Lawyers pllc, Michigan Bankruptcy.

Snapchat of Ford Field under a Harvest Moon

Send your snapchats @detroitlawyers. Seriously.

Worst. Winter. Ever.

Unless you’ve been inside since Halloween, you’re well aware that this has been an especially gross winter. Detroit has already locked up the bragging rights for most miserable winter. At this point, I’m cheering for the last couple inches of snow to set an all-time record for Detroit. Understandably, today’s storm made it difficult for all of our appointments to make it in. I figured I’d use my extra free time to share some of the highlights from my twitter timeline.

Corktown St. Patrick’s Parade

I’m too out of shape to run the 5k this year, but you can count me in for the parade. The 56th annual parade starts at noon from 6th street and Michigan Ave. I believe it takes about 2 hours for all the marching bands, floats, and clowns to get to 14th street. If you spot me there, say hi and I’ll buy you a green beer! Here’s the link to the 5k race in case you’re ambitious enough to run in freezing temperatures.

 Brewster Projects Demolition + Drones

ICYMI: On Monday, excavators started tearing down what remains of the  Brewster Douglass Housing Projects. You have to check out the aerial footage provided by drones.

Detroit Bankruptcy Updates

The City of Detroit Bankruptcy Plan of Adjustment has been filed in the Eastern District of Michigan Bankruptcy Court. Basically, this is how much of its $18 billion debt the city says it can afford to pay. Creditors (including city employees and retirees) will be able to vote on the plan in about a month.

The plan offers pensioners in uniform 96% of their monthly pension and 74% to general pensioners (that drops to 90% and 66% if they refuse to accept the City’s offer). If the pensioners vote no on the plan, they would be losing $820 million being raised by the state, Detroit Institute of Arts (DIA), and other foundations. General unsecured bondholders are being offered 20%.  $1.5 billion is also being set aside as part of the plan to fight blight and improve services for the residents of Detroit.

Bankruptcy Judge, Steven Rhodes, will hold a hearing on April 14th to determine if the disclosure statement contains enough information. If it does, ballots will be mailed to creditors so they can vote on the plan. Without any other delays, the final hearing would start July 16th.

Reno dog in Detroit

Reno dog in Detroit

Michigan Potholes

The good news is that spring isn’t too far away. The bad news is that the roads should be especially terrible this summer. Yesterday, Michigan lawmakers approved $215 million for pothole repair and infrastructure construction. If your car was damaged from a pothole MDOT knew about for 30 days then you might have some luck getting them to pay you back (but I wouldn’t hold my breath). The form to make a claim can be found here.

This also makes me think I should be doing something more useful with www.michiganpotholes.com and www.detroitpotholes.com. If you have any brilliant ideas I’d love to hear from you. You can snapchat me pothole pictures to the username ‘detroitlawyers’… seriously.

Stay warm.

Find Out Why You Were Denied Credit

Posted by & filed under Credit Score, Michigan Bankruptcy.

What to Do if You’re Denied Credit

I just read about a nifty tool at reasoncode.org to help find out why you may have recently been denied credit. Run by credit scoring company, VantageScore, the tool gives the explanation behind the confusing two-digit reason code included with your denial.

Denied Credit after bankruptcy in Michigan? We can help.

Photo Credit: TravisTruman via Compfight cc

Find Out Why

Lenders are required by law to tell you why they rejected your application for credit. The problem is that the “why” is often just a two-digit code. When you match the given code to the glossary of terms you might find a vague or confusing definition. VantageScore is hoping that their new tool helps shine some clarity on why your application was denied. When you enter your two digit reason code you’ll receive a more complete breakdown of the explanation.

Monitor Your Credit Score

Knowing why you were denied credit is just the first step in rebuilding your credit score either before or after bankruptcy. Because your credit score can impact things such as whether or not you qualify to rent an apartment, credit card interest rates, and mortgage terms, it’s important to be aware of what’s determining your credit score. You can get a free credit report every year from Experian, Equifax, and Transunion. By staying on top of your credit reports and comparing them to the reasons given when denied credit, you’ll know what lenders are looking at when you apply for credit.

When you’re monitoring your credit reports you’ll know ahead of time if there are things that need to be removed. Taking immediate steps to challenging a mistake on your credit report will minimize the harm and get you started on rebuilding your credit score.

Rebuild Your Credit

I know there are a million articles out there that oversimplify the steps needed to rebuild your credit score. While we’re also guilty of trying to sum up a confusing topic in a few paragraphs, we do think that even a little knowledge will go a long way. Rebuilding your credit is really just understanding the basics and executing them consistently over time.

We’re always happy to help shine some light on the subject. We offer workshops on rebuilding your credit and will walk our Michigan bankruptcy clients through the process after they file. The first step, however, is taking control of the information in your credit reports and finding out what those dang “reason codes” even mean!

-by Nick Best

Field Trip to the 2014 Detroit Auto Show

Posted by & filed under Uncategorized.

The Detroit Auto Show is in town

So we played hooky yesterday and checked out the Industry Preview at Cobo Hall. I’ll leave it to the professional bloggers to fill you in on the latest and greatest, but if you want to watch us sit in some really expensive cars then this video’s for you! Had I known my phone was going to automatically create a video I would have taken more pictures that included us. I haven’t been to the show in quite a while and it was amazing to what’s new. All the cars are drool worthy, but I was most awestruck by how they can fit such an enormous and complex event indoors. Some of the most impressive feats of engineering are probably the displays some of the major car companies put together. Ford basically brought their assembly plant to their display to show off the robots that are used when building pickup trucks.

What’s New?

If you haven’t been to the show in a few years you’ll immediately notice how every company is making huge strides in the green car revolution. My favorite part was probably crawling around the different cars and seeing what new gizmos and gadgets are starting to come standard.  While you’re admiring all the glamour and glitz, don’t forget that in recent years both the City of Detroit and 2 of the Big 3 have filed for bankruptcy protection. I’m not trying to spoil this great event, but it’s important to remember that even big business and major cities can’t always turn things around without help.

The public show starts Saturday and is definitely worth checking out. Let us know what you liked most about the show this year.

The screenshot from the video is Cadillac’s new concept car, Elmiraj.

Cadillac Elmiraj - Concept Car | Detroit Auto Show

Cadillac Elmiraj – Concept Car | Detroit Auto Show

–Nick Best

Can I Keep a Credit Card if I file Bankruptcy?

Posted by & filed under Chapter 7, Credit Score, Michigan Bankruptcy.

Can I keep my credit card if I file for Chapter 7 bankruptcy?

You'll Get Credit Card Offers After Bankruptcy

You’ll Get Credit Card Offers After Bankruptcy

I just had a client call with the same questions we’ve been asked a million times before… “Can I keep my credit card if I file for bankruptcy? It’s a great question that unfortunately gets the typical lawyer answer. “It depends.” Unlike a lot of legal questions, however, this is one that can get mostly explained during a quick phone call. The following information usually answers my client’s questions.

The simplest answer is that you can decide to keep one of your credit cards open if that credit card company lets you. It really comes down to the status of your credit card and which credit card company we’re talking about.

Do I have to list all my credit cards on the bankruptcy petition?

When you file for Chapter 7 bankruptcy in Michigan you are required to list all your creditors on your petition.  Whether or not you have to list a creditor depends on if there is currently a balance on that card. If you are in default (haven’t paid in a while) or have a balance and making minimum payments you have to list them on the bankruptcy petition.  Most credit card companies will cancel your credit card with them unless you reaffirm (agree to pay back) the debt.

It’s a different story, however, if your account is open but paid off at the time of filing. An open account with no balance isn’t considered a debt, and so you don’t have to list them on the bankruptcy petition so that they receive notice. Some clients decide they want to pay off the balance on one of their credit cards. Either they like the bank that issued the card, they’re afraid of not being able to get a credit card after bankruptcy, or they don’t consider that their “main” debt  and so they want to pay it off.

What happens if my credit card company finds out that I filed for bankruptcy?

Clients are sometimes surprised to find out that even if they pay off one of their credit cards, the credit card company can still close the account if they find out about the recent bankruptcy filing. In fact, they’ll probably find out about it through the credit bureaus or other reporting agencies. The danger is that even after struggling to get a credit card paid off before filing bankruptcy, the company may still decide that you’re a higher credit risk now that you have a history that includes bankruptcy.

Will I be able to get a credit card after filing for bankruptcy?

The reason I usually don’t suggest trying to keep a credit card while filing bankruptcy is because you’ll get plenty of offers in the mail once you file. Although your current credit card company may decide that you’re a higher risk because of the filing and cancel your card, there will be plenty of other companies that see you as a much safer bet since you don’t have all that other debt to worry about after bankruptcy. You have to be careful, however, as many of these offers come with very high interest rates. While I like to reassure clients that bankruptcy won’t prevent them from obtaining credit in the future, there are a series of steps that should be taken to rebuild your credit as quickly as possible.

As usual, these blog posts shouldn’t be taken as legal advice nor does it form an attorney-client relationship. Laws are always changing and every state and situation is unique. Contact us or your local bankruptcy attorney for specific advice for your situation. Michigan consultations are always free if you call us at (248) 237-7979.

-by Nick Best

How Much Does a Chapter 7 Bankruptcy Cost?

Posted by & filed under Chapter 7, Michigan Bankruptcy.

tl;dr| Come in for a free consult and we’ll give you an exact bankruptcy cost.

Understandably, we get calls all the time wanting to know how much it’ll cost them to file for bankruptcy. Because the final cost depends on many complicated factors, the question can be difficult to answer without getting more information about your financial situation. But I know you’re not skimming through this to learn about the intricacies of all the complicated factors. Right now you want a ballpark estimate. So I’m willing to ballpark it if you promise to stick around and read the disclaimers. Deal?

We can usually get you through bankruptcy for less than $2,000 and many times it can happen for less than $1,000.

Now that we scratched that itch just please stick with me a little longer so I can explain what those costs consists of and how you can help yourself save money. The three most unavoidable cost associated with bankruptcy are the filing fees paid to the court, required credit counseling and debtor education expenses, and attorney fees. While we only directly control our attorney fees we charge (and we try to keep them as low as possible while still delivering the best value possible), we can help you save money with the other two costs.

Fees Charged By the Court to File Bankruptcy

Currently, a chapter 7 bankruptcy petition costs $306 at the time of filing. The court will increase those fees every so often so keep an eye on their website (especially if this is an old post). What can you do if you need to file for bankruptcy before you have the money? You can either ask the court to pay the $306 in installments or apply for a fee waiver completely (we can do both of these things for you when you use us). The court will usually allow you to get the protection bankruptcy offers and make payments over the next few months. Getting the fee completely waived is more difficult because you have to be unable to make the filing fee payments and your income must be below 150% of the current poverty level. The picture below shows what 150% looks like for families of different sizes.

http://www.detroitlawyers.com/wp-content/uploads/2013/12/Detroit-Bankruptcy-Costs-and-Fees-300x269.jpg

http://www.detroitlawyers.com/wp-content/uploads/2013/12/Detroit-Bankruptcy-Costs-and-Fees-300×269.jpg

Bankruptcy Cost of Credit Counseling and Debtor Education

Since 2005, in order to get a discharge of your debts you’ll have to complete both a credit counseling and debtor education course. I’ll save the particulars of how it works for another post but most approved courses charge between $20-$50. Just like most things, some places will rip you off and some might be free if you qualify. Please don’t spend more than $10, however, on a debtor education course before calling us. We’ll be able to refer you to a couple approved places will keep your bankruptcy cost to a minimum. (248) 237-7979

What About Your Attorney Fees?

Well if you stuck around this long it’s because you want to know how much WE charge. Well this is where it’s the hardest to give you an exact number without learning more about your case at a FREE CONSULTATION. Nolo says the current average is $1,200-$1,5000. Unless you have a complex or simple case, most of our fees are actually in the $800-$1,5000 range. We can usually give you a little better gauge over the phone of where you might fall but if you sit with an attorney for a free consultation you’ll get an exact number. We promise. The consultations are always completely free and you’re under no obligation if we find bankruptcy isn’t right for you.

We’re also available if you have any questions about filing yourself, advertised attorney fees that seem too good to be true (they are), and things you should look for in a bankruptcy attorney so you don’t run into problems in the future.

Call us today. You have nothing to lose.

–Nick Best