Category Archives: Bankruptcy

10 Things You Should Know About Bankruptcy Court

1. Deadlines are critical in bankruptcy court. The regulations for this process are very complex, can be technical, and all case deadlines must be met. Failing to file the appropriate forms or documentation on time could result in your case being dismissed or delayed. If your case is dismissed you could lose your filing fees and have to start over again from the beginning.

2. New federal regulations passed in 2005 make it harder to qualify for complete debt elimination. The Bankruptcy Code was changed in 2005 to make it more difficult for consumers to wipe out debt completely if there are resources available to pay these obligations. Many consumers who would have qualified for a Chapter 7 discharge before these changes must now use Chapter 13 instead, which involves repayment of some of your debts. This is determined using the Means Test.

3. A Chapter 13 bankruptcy includes a repayment plan that must be filed with the bankruptcy court. The court will determine exactly what income and expenses you have, and then calculate the reasonable expenses and monthly repayment amount for your case. This plan must be submitted to the court and confirmed.

4. Representing yourself in bankruptcy court can be a big mistake. The laws regarding bankruptcy can be very confusing, and many common errors could cost you a chance at a new financial start. An experienced attorney can help you determine the right exemptions, represent you at hearings and meetings with creditors, and get the best results possible for you.

5. Bankruptcy court is a court which exclusively deals with bankruptcy cases. These courts are located around the United States, and they only handle bankruptcy cases and matters related to this legal area.

6. The bankruptcy court will appoint a trustee in your case. This trustee will be responsible for overseeing your specific case and ensuring that all of the documentation is filed. The trustee is not in favor of either the consumer or creditors, but is an officer of the court instead.

7. Choosing the right attorney to represent you in bankruptcy court is important and can affect the outcome of your case. You want a lawyer who will aggressively defend you and work hard to overcome any objections that may be presented by your creditors or the trustee. Experience is also important, so you want an attorney who is very knowledgeable in bankruptcy law.

8. The penalties for lying or hiding assets in a case can be severe. The bankruptcy court judge has the authority to dismiss your case, order fines and penalties deemed appropriate, or even have perjury or other criminal charges filed against you. It is essential that you are completely honest in all your dealings with the court to avoid any sanctions or penalties.

9. The exemptions you claim in bankruptcy court will affect whether or not your property can be seized and sold to pay creditors. The laws of each state are different. An experienced attorney can help you determine whether to use the federal or state exemptions, or whether a combination of these two are better in your specific case.

10. A discharge is the order issued by the bankruptcy court when your case is completely finished and closed out. Usually any debts that have not been repaid are eliminated in the process unless you have reaffirmed your obligation.

Call Firebaugh & Andrews for your free evaluation, with over 50 years combined experience they can make sure you make the right decision.

What Bankruptcy Records And Documents Are Needed?

The documents listed on this page provides an overview of the type of information we will need to get the bankruptcy completed.  Each case is different variations are common.

There are some differences between the documents required for a Chapter 7 bankruptcy petition and those required for a Chapter 13 bankruptcy petition.

Typical documents and information taken into account during a Chapter 7 bankruptcy case include:

  • A list of your current personal property and its value. This includes assets such as:
    • Cash
    • Checking or savings accounts, certificates of deposit or annuities
    • Qualified educational or tuition accounts
    • Pension or profit sharing accounts
    • Household goods, furniture, electronics and computer equipment
    • Deposits with utility companies, landlords, phone companies, etc.
    • Collectibles such as books, art, antiques, etc.
    • Automobiles, trucks, trailers and other vehicles
    • Boats, motors and accessories
    • Aircraft and accessories
    • Clothing
    • Furs and jewelry
    • Firearms, sporting equipment, photographic or other hobby equipment
    • Interest in insurance policies
    • Stocks and business interests
    • Government or corporate bonds
    • Moneys due you by others, including tax refunds
    • Alimony, maintenance, support, or property settlements to which you are entitled
    • Interests in the estate of a decedent, life insurance or trust
    • Patents, trademarks and copyrights
    • Licenses and franchises
    • Office equipment, furniture and supplies
    • Machinery, fixtures and equipment used in business

A bankruptcy lawyer can help you determine which of this property can be included on the schedule of claimed exemptions and protected from liquidation.

  • A list of real property (real estate), including your interest in the property, the current value and the amount of any secured claim.
  • A list of your creditors, the amount that you owe them and any security on those accounts

A bankruptcy attorney can help you determine which debts belong on the secured schedule and which of your unsecured debts belong on the priority schedule and which on the non-priority schedule.

  • A list of any current contracts or unexpired leases, whether the debtor is the lessor or the lessee of the property
  • A list of the names and addresses of any co-debtors on any accounts, along with the names and addresses of the creditors on those accounts

Co-debtors can be affected by your filing. The impact on a co-debtor is different depending upon whether you file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. A bankruptcy lawyer can explain how each one affects any joint account holders or co-signers on your accounts.

  • The name and address of your employer, along with your occupation and the length of your employment
  • Documentation of your income from employment, including payroll deductions
  • Income from other sources, including alimony or maintenance
  • In some cases, a list of current monthly expenses
  • A list of any payments made to creditors during the past 90 days
  • A list of all payments made during the past year to creditors who are ‘insiders’. (Creditors with whom the debtor has another relationship, like family members)

A bankruptcy lawyer can provide you with the exact legal definition of ‘insider’ and help you determine whether or not you have made any payments that fall within this classification.

  • A list of any lawsuits or administrative proceedings the debtor was a party to within the year preceding filing
  • A description of any and all property that has been seized, garnished, attached, repossessed, foreclosed or returned during the preceding year
  • A list of any property that has been assigned for the benefit of creditors within the 120 days preceding
  • Any property that has been in the hands of a receiver, custodian or court-appointed official during the preceding year
  • Any gifts or charitable contributions you made within the preceding year
  • Losses from fire, theft, casualty or gambling during the preceding year
  • Payments related to debt counseling or bankruptcy within the preceding year
  • Any property transferred during the two years immediately proceeding filing
  • A list of any financial accounts closed, sold, or transferred within the preceding year
  • A list of safe deposit boxes (along with locations and contents) held presently or within the past year
  • A list of any set-offs by any creditor in the past 90 days
  • Any property held or controlled by the debtor for another person
  • All addresses at which the debtor has lived during the preceding three years
  • Nature, name and location of any businesses owned during the preceding six years

Having these items ready will help speed up the process.  Call us today for your free consultation 734-722-2999

How Long Does Filing Chapter 7 Take?

How Long Does Filing Chapter 7 Take?

For those who are struggling with debt and experiencing harassment from creditors, time is of the essence. This can be especially true when it comes to getting finances back on track and restoring a sense of normalcy to life. You, or someone you know, may be considering filing Chapter 7 bankruptcy but are unsure about how long the filing process takes.

Typically, a Chapter 7 bankruptcy case is relatively quick to complete. Your bankruptcy case could be completed and discharged within 3-6 months of filing bankruptcy.

However, there are some important dates that can affect your right to file a case and obtain relief. The following filing timeline illustrates the relevant dates in a typical Chapter 7 bankruptcy case.

6-8 Years Before Your Bankruptcy
If you received a Chapter 13 or Chapter 12 discharge in a case filed within the previous six years, you will be eligible for a Chapter 7 discharge generally if, in the prior case, you paid at least 70 percent of your allowed unsecured claims, and your plan was proposed in good faith and was your best effort.

You are ineligible for a Chapter 7 discharge until eight years from the date you filed a prior Chapter 7 and received a discharge.

1 Year Before Your Bankruptcy

  • If you have tried to delay or defraud your creditors by transferring, hiding, or destroying your property within the 1-year period prior to your bankruptcy, the court may deny you a Chapter 7 discharge and even allow your creditors to recover the property that you transferred.
  • Also, if you pay back one of your creditors who is also a relative or close business associate (“insider”) at any time within the 1-year period prior to the filing of your bankruptcy case, the payment may be deemed an unlawful preference and the court may recover all such payments and distribute them to your other creditors.
  • If you had a prior bankruptcy case dismissed within one year of the time you file a Chapter 7 case, the Automatic Stay entered in the Chapter 7 case will be terminated within 30 days unless you can demonstrate that the Chapter 7 case was filed in good faith.
180 Days Before Your Bankruptcy
If within 180 days before your bankruptcy you had a prior bankruptcy case that was dismissed because you failed to obey court orders or you voluntarily requested a dismissal, then you may not file your bankruptcy case until this 180-day period expires.

Also, within the 180 days before your bankruptcy filing, you must receive an individual or group briefing from an approved nonprofit budget and credit counseling agency.

90 Days Before Your Bankruptcy

  • You must be a resident of the state in which you intend to file your bankruptcy case for at least 90 days before the filing. If you have not lived in the state in which you intend to file your case for at least 90 days, you may only file your case in the state where you have resided, or which has been the location of your principal assets, for a majority of the prior 180 days.
  • Also, if you pay back any of your creditors, even one who is not a relative or close business associate (“insider”), at any time within the 90-day period prior to the filing of your bankruptcy case, the payment may be considered an unlawful preference and the court may recover all such payments and distribute them to your other creditors.
  • If you incurred new credit of $500 or more for “luxury goods or services” within the 90-day period before your bankruptcy, or if you obtain a cash advance in the amount of $750 within 70-day period before your bankruptcy, the debt is presumed to be non-dischargeable.
Your Case is Filed!

  • Your case is formally commenced when you file your bankruptcy petition with the appropriate bankruptcy court. In most cases, as soon as you file your petition, the court will enter an Automatic Stay order prohibiting your creditors from taking or continuing any collection or legal action against you. This means no more harassing letters or phone calls for as long as the automatic stay remains in effect, generally for the duration of your bankruptcy case.
  • Next, the court will send a notice of your case to all of the creditors listed in your petition.
  • Additionally, the bankruptcy court will assign a bankruptcy trustee to oversee your case. The trustee is a federal employee appointed by the court to monitor your case and make sure you are eligible for bankruptcy. The trustee will review your petition, make sure that it is complete, and then schedule a meeting of your creditors.

15 Days After Your Case is Filed
You have a deadline of 15 days after you file your petition to file certain financial “schedules” with the court-documents declaring your assets, liabilities, expenses, income, and a statement of your affairs. In most case, however, your attorney will file these schedules with your petition.

Approximately 15 Days After Your Case is Filed
Within approximately 15 days after you file your case, the court will mail the Notice of Commencement of Case to you and to all of the creditors listed in your petition. This notice will inform you of the date set by the court for the meeting of your creditors, and the deadlines for your creditors to object to your case and file their claims against you.

Approximately 30 Days After Your Case is Filed

  • Within 30 days after you file your case, or before the meeting of your creditors if that occurs first, you are required to file a Statement of Intention. In this document, you advise the court whether you intend to keep your property that serves as collateral for your debts, or whether you intend to surrender it to your creditors.
  • If you intend to keep the property, you must indicate your intention to: (1) reaffirm your debts and continue making all of your payments on those debts; or (2) redeem the property by paying the fair market value for it, in which case you will receive a discharge of debt owed over the fair market value of the item.
  • You must serve a copy of your Statement of Intention on the bankruptcy trustee and your creditors at the time you file it with the court.

    45 days After Your Statement of Intention is Filed
    You have 45 days after your Statement of Intention is filed to surrender or keep your property as you indicated in your Statement and make all necessary payments.

Approximately 3 to 6 Weeks After Your Case is Filed

  • The court will hold the Meeting of Your Creditors about three to six weeks after your bankruptcy case is filed. At least seven days before this meeting, you are required to provide to the trustee and any creditor requesting it a copy of your most recently filed tax return.
  • The court-appointed trustee will preside over this meeting. At the meeting, which you are required to attend, you will be asked to testify under oath as to the accuracy of the statements in your petition. However, most creditors typically do not appear at the meeting, and you will not be before a judge. The meeting is very informal, and in most cases will last no more than 10 minutes. If you do not attend the meeting, your case will be dismissed.
  • Within 45 days after you file your petition, you must file a statement containing a certificate from your attorney that you received an explanation of the various chapters available to you under the bankruptcy code, evidence of any payments you’ve received from any employer within 60 days of your filing, an itemized statement of your monthly income, and an estimate of any increase income or expenditures you expect over the next 12 months.

    30 Days After The Meeting of Your Creditors
    The bankruptcy trustee and your creditors have to 30 days after the conclusion of the Meeting of Creditors in which to make objections to your exemptions.

    60 Days After The Meeting of Your Creditors

    • Your creditors have 60 days after the date first set for the Meeting of Your Creditors to object to the discharge of any of the debts listed in your petition and schedules.
    • Your creditors can object to your request to discharge a debt if the debt was obtained or incurred as a result of any of the following types of misconduct: fraud; embezzlement or larceny; and any willful or malicious injuries you have caused others; or a divorce or separation (this does not include debts for child support and spousal maintenance, which are non-dischargeable by law).
    • Additionally, your creditors can object to the discharge of all your debts if you have engaged in any of the following conduct: concealment or destruction of property or financial records; false statements; withholding information; failing to explain losses; failure to respond to material questions; or a discharge in a prior Chapter 12 or 13 case filed within the previous 6 years or a Chapter 7 case filed within the previous 8 years.
    • The trustee must move to dismiss your case within this time period if he finds that the granting of relief would be an abuse of the provisions of Chapter 7. You will receive your Chapter 7 discharge 60 days after the meeting of your creditors You will receive your discharge as soon as the 60-day time period for objecting to discharge or moving to dismiss your case expires. Even if you receive your discharge, the trustee may, however, move to set it aside if you do not turn over nonexempt property or if you commit other bankruptcy violations.

    The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 imposes one last hurdle before you’re eligible for your discharge–the financial education requirement. This requires you to complete an instructional course concerning personal financial management. Your attorney can refer you to an approved financial management class.

    90 Days After The Meeting of Your Creditors
    All of your creditors (except for government entities) must file their proofs of claim (these are documents your creditors submit to the court specifying how much you owe them) within 90 days after the first date set for your creditor meeting if they wish to share in the payments from your case if any assets are available for liquidation.

Government entities that have claims against you (such as the IRS) have 180 days after the filing of your case to submit their proofs of claim.

 

Should I go to a credit counselor, or to a debt consolidation service?

It all depends on your exact circumstances. Many people can be helped by credit counseling, but be careful who you go to.. Your church or neighborhood group may also have a good credit counseling program.

In my opinion, most people will not be helped by a debt consolidation service. In fact, there are many people who have paid for debt consolidation services, only to end up owing a lot more money than they did when they started. You have probably seen a lot of commercials advertising “nonprofit” services, promising to negotiate your debts with all of your creditors and to solve all of your problems. Many of those “nonprofit” services were created by credit card companies and finance companies, and most of their counselors are not properly trained. None of them can offer the absolute results that federal bankruptcy law does. On top of that, there are certain creditors who absolutely refuse to work with consolidation services. They don’t have that option in bankruptcy, where creditors have to follow the same rules as everyone else.

Firebaugh & Andrews can help you figure out what is the best course of action to take, Call us for your free consultation. 734-722-2999

What kinds of collection actions does bankruptcy stop?

Bankruptcy stops any sort of collection action that you can think of, except for criminal trials and child support matters. The list is too long to spell out in full, but here are some examples: Foreclosures, evictions, garnishments, lawsuits, state or federal tax collections, tax liens or penalties, harassing letters and phone calls, and anything else that might in any way be interpreted as an attempt to collect on a civil debt. Depending on your exact situation, some of those debts may still have to be dealt with after filing, but at least you will now have some control over the process. There are certain debts that can almost never be discharged, such as criminal fines, certain taxes, and child support. But even those debts can be spread out over time in a Chapter 13 plan.  Call Firebaugh & Andrews for a free consultation 734-722-299

Should you file for bankruptcy before or after a divorce?

Many people cite divorce as a leading reason for their bankruptcy filing.  However, planning ahead can make both your bankruptcy and your divorce less complicated and more cost effective.  Whether you should file a bankruptcy before or after a divorce depends on where you live, how much property and debt you have, and what type of bankruptcy you wish to choose to file.

Bankruptcy and Divorce Costs

Bankruptcy filing fees are the same for joint and individual filings.  So filing a joint bankruptcy with your spouse before a divorce can save you a lot on court fees.  Also, if you decide to hire a bankruptcy attorney, your attorney fees will likely be much lower for a joint bankruptcy than if each of you filed separately. However, you should let your bankruptcy attorney know about your upcoming divorce as there may be a conflict of interest for him or her to represent you both.

Filing for bankruptcy before a divorce will simplify the issues regarding debt and property division and lower your divorce costs as a result.

Chapter 7 vs. Chapter 13 Bankruptcy

A Chapter 7 is a liquidation bankruptcy designed to get rid of your unsecured debts such as credit card debt and medical bills.  In a Chapter 7, you usually receive a discharge after only a few months.  So it can be completed quickly before a divorce.

In contrast, a Chapter 13 bankruptcy lasts three to five years because you have to pay back some or all of your debts through a repayment plan.  So if you were looking to file a Chapter 13, it may be a better idea to file individually after the divorce because it takes a long time to complete.

Property Division

Wiping out your debts jointly through a bankruptcy will simplify the property division process in a divorce.  However, before filing a joint bankruptcy you must make sure that your state allows you enough exemptions to protect all property you own between you and your spouse.  Certain states allow you to double the exemption amounts if you file jointly.  So if you own a lot of property, it may be a better idea to file a joint bankruptcy if you can double your exemptions. 

If you can’t double your exemptions and you have more property than you can exempt in a joint bankruptcy, it may be more advantageous to file individually after the property has been divided in the divorce.  Also, keep in mind that if you file bankruptcy during an ongoing divorce the automatic stay will put a hold on the property division process until the bankruptcy is completed.

Allocation of Debts

Litigating which debts should be assigned to each spouse in a divorce can be a costly and time consuming process.  Further, ordering one spouse to pay a certain debt in a divorce decree does not change the other spouse’s obligations toward that creditor.

For example, let’s say your ex-husband was ordered in the divorce to pay a joint credit card you had together.  If he doesn’t pay it or files bankruptcy then you are still on the hook for the debt and the creditor can come after you to collect it.  If you end up paying the debt, you have a right to be reimbursed by your ex-husband because he violated the divorce decree. This holds true even if he filed bankruptcy because he can discharge his obligation to pay the creditor but he cannot discharge his obligations to you under the divorce decree.

However, trying to collect from your ex will usually mean spending more money to pursue him in court.  As a result, it may be in both spouses’ best interest to file bankruptcy and wipe out their combined debts before a divorce.

Income Qualification for Chapter 7

If you intend to file a Chapter 7, the decision to file before or after a divorce can come down to income if you maintain a single household.  If you wish to file jointly, you must include your combined income in the bankruptcy.  If your joint income is too high, then you may not be able to qualify for a Chapter 7.

This can happen even if each spouse’s income individually is low enough to qualify on his or her own.  This is because Chapter 7 income limits are based on household size and the limit for a household of two is not twice that of a single person household (it’s usually only slightly higher).  In that case, it may be necessary to wait until each spouse has a separate household after the divorce to file bankruptcy.

Call Firebaugh & Andrews at 734-722-2999 for your free consultation.

What Are The Michigan Bankruptcy Exemptions?

What Are Bankruptcy Exemptions?

Bankruptcy exemptions determine what type of property you can keep when filing for bankruptcy. Every state has its own bankruptcy exemption laws that specify the types and amounts of property that you can keep. Items like your house, car, and household goods are generally protected and can’t be sold in order to pay off your debts. If an item is not protected or is worth more than what the state exemption will allow you may be forced to sell the item to pay off your debts.

In a Chapter 13 bankruptcy you are permitted to keep property that is worth more than what the state exemptions allow provided that you pay back your creditors the portion that is not exempt.

Choosing Between State and Federal Exemptions

Not only does every state have its own bankruptcy exemption laws, there are federal exemption laws as well. Michigan residents are permitted to use either state or federal exemptions.

Important note: In 2011 the Sixth Circuit Bankruptcy Appellate Panel found that Michigan’s bankruptcy-only exemptions (these are exemptions that apply only in bankruptcy, and not to other situations where a creditor is trying to collect a debt) were unconstitutional. Luckily, in August of 2012, the Sixth Circuit Court of Appeal reversed that decision, holding that Michigan’s bankruptcy-only exemptions are constitutional. As of now, Michigan bankruptcy filers can choose to use the bankruptcy-only exemptions.

Michigan Exemptions and Married Debtors

Married debtors filing jointly are permitted to double the listed exemptions amounts. The exception to the rule is the homestead exemption. Only one debtor may exempt the equity in a home, not both.

Common Michigan Exemptions

Some of the more commonly used Michigan exemptions are listed below. All law references are to the Michigan Compiled Laws unless otherwise indicated.

Homestead Exemption

The homestead exemption protects the equity that you have in your residence up to $37,775

Motor Vehicle Exemption

The motor vehicle exemption protects equity that you have in your vehicle up to $3,475.

Household Goods and Personal Property

This exemption protects your household goods such as furniture, utensils, books, appliances, and jewelry valued up to $600 per item and $3,775 total. 600.5451(1)(c). In addition:

  • There is no limit as to the amount of clothing that you can keep. 600.5451(1)(a)(iii).
  • Computer accessories are protected up to $650. 600.5451(1)(n).
  • There is no limit to the amount of family pictures that you can keep. 600.5451(1)(a)(i).

Pension and Retirement Accounts

Most pension and retirement accounts are completely protected with a few exceptions.

  • Individual Retirement Accounts and Annuities are fully protected with the exception of amounts that are contributed within the 120 days prior to filing for bankruptcy. 600.5451(1)(l).
  • Traditional, Simple, or Roth IRA’s are protected up to $1,245,475. (This amount is adjusted every three years.
  • Education IRA’s are protected up to $6,225. 11 U.S.C. §541(b)(5)(c).
  • A pension, profit sharing, stock bonus, or other qualified plan is fully protected with the exception of amounts contributed in the 120 days prior to filing. 600.5451(1)(l).

Wages

You can protect up to 60% of earned but unpaid wages for head of household and up to 40% for others. The head of household can keep at least $15 per week plus $2 per week for each dependent other than the spouse and $10 per week for others. 600.531.

Insurance Benefits

Insurance benefits are fully protected regardless of the amount. 500.2207. Benefits paid on behalf of an employer are fully protected. 500.2210. Benefits paid by any stock, mutual life, health, or casualty insurance are also fully protected. 600.5451(1)(i).

Public Benefits

The public benefits listed below are fully protected regardless of the amount received.

  • Crime victims’ compensation (18.362)
  • Unemployment compensation (421.30)
  • Korean War veterans’ benefits (35.977)
  • Vietnam War veterans’ benefits (35.1027)
  • Welfare benefits (400.63)
  • Worker’s compensation benefits (418.821)

Tools of Trade

Your interest in the tools, implements, materials, stock, and other items necessary to carry on your profession, trade, occupation, or business is protected up to $2,525. 600.5451(1)(i).

Researching Exemption Statutes

This article only mentions the most commonly used Michigan exemptions. It does not mention all exemptions that are available to you. Keep in mind that state exemptions change periodically so you should call Firebaugh & Andrews for your free consultation today 734-722-2999

When to use Emergency Bankruptcy Filings.

If you are facing a financial crisis — such as a foreclosure, auto repossession, garnishment or court judgment — you may not have a lot of time to protect yourself from devastating consequences. An emergency bankruptcy filing may solve the immediate problem and give you the breathing room you need.

Prevent Foreclosure, Repossessions And Garnishments In Michigan

When you file bankruptcy, you are protected by the “automatic stay.” The automatic stay requires creditors to put an immediate stop to all debt collection efforts. The following are examples of creditor actions that can be stopped when you file bankruptcy:

  • Home foreclosure: Filing bankruptcy will stop the foreclosure and give you time to decide whether to keep the home or give it up.
  • Auto repossession: Filing bankruptcy will stop a repossession. As long as the car has not been sold, you can get it back.
  • Harassing phone calls: Once you file bankruptcy, creditors cannot call you or your employer.
  • Lawsuit judgments: Filing bankruptcy puts an immediate stop to collection of lawsuit judgments.
  • Wage garnishments: Filing bankruptcy will stop the garnishment. If you act soon enough, it may allow you to get garnished wages back.
  • Bank account garnishments: Filing bankruptcy will stop the garnishment. If you act soon enough, it may allow you to get your money back.

Call Firebaugh and Andrews we handle emergency bankruptcy filings in Michigan, call us today for your free consultation. 734-722-2999

Do you have to worry about losing your job after bankruptcy?

People considering bankruptcy naturally worry how it will affect their current employment or job search. The answer is that there are laws protecting current employees from discrimination because of bankruptcy — but employers sometimes ignore them.

It is easier to legally discriminate against you when you are applying for a job than after you are hired — so long as the bankruptcy is not the sole reason for not hiring you.

You may worry less if you consider the positive aspects of hiring or retaining a worker who has declared bankruptcy. A bankrupt employee is a better risk than one who is still saddled with unpayable debt — the employer doesn’t have the hassle of garnishing wages from a bankrupt worker. Those debts have already been discharged.

Bankruptcy Discrimination Questions

These are three of the most commonly asked questions about employment and bankruptcy.

1. Will your employer find out about your bankruptcy, decide you are not the kind of employee it wants, and terminate you?

No. The Bankruptcy Code forbids employers from discriminating against employees solely on the basis of debt. An exception would be if you signed an agreement when you were hired to maintain an immaculate credit rating — in which case declaring Chapter 7 or Chapter 13 could be seen as a violation of your agreement.

2. Will a prospective employer, conducting a background check on you, discover the filing and cross you off its list?

Yes. Employers are on the lookout for a reason not to invest in you, and a rocky credit history may suggest to them you are not good with money, or that you might steal if you are hired. This is unfortunate. While prospective employers may factor your bankruptcy into their decision, it may not be the sole reason for rejecting you.

3. What if I don’t tell them about my filing?

It’s important to tell prospective employers the truth. If you are found out later, the omission can result in termination. Your employer will be on solid ground not because of the bankruptcy itself, but because you misled them.

Bankruptcy Planning Attorney Serving Westland And Metro Detroit

For more information about bankruptcy and discrimination, contact attorneys Firebaugh & Andrews at 734-722-2999 for your free consultation

Why choose Firebaugh & Andrews for your bankruptcy?

Get a fresh financial start with Firebaugh & Andrews P.L.L.C Bankruptcy Law Firm
Advice and representation for individuals and businesses through the intricacies of the Bankruptcy process
Filing for bankruptcy can be a very time-consuming and complicated process. As a debtor you must comply with numerous federal laws and regulations and a mistake at any point in this process can be very costly resulting in the court refusing to discharge your liabilities. The consequences of this can have a long-term financial effect and put a high strain on you and your family. With so much at stake it is essential that you make the right choices and trust a professional bankruptcy lawyer right from the start. Whether you are considering filing under Chapter 7, 11 or 13, Firebaugh and Andrews will be able to guide you through the labyrinth of procedures and requirements, to ensure a fresh financial start with less to worry about and more to enjoy from your future life.

What is Bankruptcy?

If you are a business or an individual who cannot meet your financial obligations in relation to repaying some or all of your debt, bankruptcy could be the way for you to go. Federal law governs the rules and procedures related to bankruptcy in the U.S. so individual states cannot legislate in this area. We will determine whether bankruptcy is the right way for you to seek relief and whether you should do it under Chapter 7, Chapter 13 or Chapter 11 of the United States Bankruptcy Code.
Our Firm
Our head attorneys, Samuel G. Firebaugh and Roberta W. Andrews have over 40 years of experience between them in practicing bankruptcy law as well as additional knowledge in the practice of other areas of law, finance and business. You can rely on their competence, in-depth knowledge and case experience, as well as their high professionalism and rest assured that your circumstances will be treated with the utmost attention and you will receive a friendly, compassionate and personalized service. Our lawyers always put the interests of our clients at heart and make sure that you are given the best advice about the choices you have. Samuel and Roberta will be with you every step of the way, making sure that your case that you get the best possible outcome depending on your individual circumstances.

Get in Touch
There’s no better time to get in touch with Firebaugh & Andrews than today. Call us on 734-722-2999 and re-start your finances for as little as $310.00 down.
You can find us
38545 Ford Rd Ste 104
Westland, MI 48185
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