Category Archives: Chapter 7

help

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

abcd

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.

 

help

Chapter 13 Bankruptcy is it Better for My Credit Than Chapter 7?

Chapter 7 and Chapter 13 bankruptcy will stay on your credit report for the same amount of time; about ten years. Although they both have the same effect on your credit score, a particular creditor reviewing your report to decide whether to lend you money might view one chapter more favorably than the other. In particular, a creditor might be more willing to lend to you if you filed for Chapter 13 rather than Chapter 7.

Bankruptcy &Your Credit Report and Score

Your credit report is important if you want to borrow money – the potential lender will review the report to determine if lending to you would be risky. Those with good credit are a low risk and are more likely to get loans with good terms; those with poor credit are high risk and may have more difficulty.

These lenders will look at your credit score and your overall credit history when deciding whether to lend to you. Your credit score is based on a multitude of factors, including the amount of available credit you have, the ratio of your balances due to your credit limits, your total amount of debt and any judgments or bankruptcies you have on record.

Chapter 7 and Chapter 13 bankruptcy both affect your credit score the same – having a Chapter 13 bankruptcy on your credit report will not be any better for your score than a Chapter 7. However, the individual reviewing your report will look at more than your score.

Some Lenders Take Into Account the Difference Between Chapter 13 and Chapter 7

A Chapter 13 bankruptcy involves repaying some or all of your debt over a three- to- five-year period, while a Chapter 7 bankruptcy involves wiping out most of your debts without paying them back.

Both Chapter 7 and Chapter 13 theoretically leave you in a good position to take on new debt, as they both free you from the burden of old debts and give you a fresh start. Beyond that, if you have a Chapter 13 on your credit report, a lender looking at your report may see it as a responsible way to handle your debt, because you made a good faith effort to repay your debts despite your financial hardship. In that way, a Chapter 13 may be better for your credit than a Chapter 7.

Call Firebaugh & Andrews for your free evaluation today 734-722-2999

abcd

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

a2

Advantages & Disadvantages to a Michigan Chapter 7 filing:

Advantages to a Michigan Chapter 7 filing:

  1. You receive a complete fresh start. After the bankruptcy is discharged the only debts you owe will be for secured assets on which you choose to sign a “Reaffirmation Agreement.”
  2. You have immediate protection against creditor’s collection efforts and wage garnishment on the date of filing.
  3. Wages you earn and property you acquire (except for inheritances) after the bankruptcy filing date are yours, not the creditors or bankruptcy court.
  4. There is no minimum amount of debt required.
  5. Your case is often over and completely discharged in about 3-6 months.

Disadvantages to a Michigan Chapter 7 filing:

  1. You lose your non-exempt property which is sold by the trustee. If you want to keep a secured asset, such as a car or home, and it is not completely covered by your Michigan bankruptcy exemptions then Chapter 7 is not an option.
  2. If facing foreclosure on your home, the automatic stay created by your Chapter 7 filing only serves as a temporary defense against foreclosure.
  3. Co-signors of a loan can be stuck with your debt unless they also file for bankruptcy protection.
  4. If you filed a prior case and received a discharge of your debts, you can only file a second Chapter 7 bankruptcy case eight years after you filed the first case.
help

Michigan Chapter 7 Bankruptcy Facts

Recovery after the recession that started in the U.S. at the end of 2007 has been slower than expected and jobs have grown at a very inconsistent and patchy rate. Michigan was one of the 8 states that got hit the hardest by the recession due to huge layoffs and closures in the automotive industry. In 2009 the state lost over 280K jobs and unemployment rate was around 16%.
In this tight economy many consumers who have accumulated debt have been pushed to either seek debt relief or file for bankruptcy. Chapter 7 is generally the simplest and quickest form of bankruptcy and is available to individuals, married couples and companies.
So what is Chapter 7 bankruptcy? Here are the key points to bear in mind if you are considering filing for bankruptcy in the state of Michigan:
• It is a court process (known as “liquidation”) and one of the quickest and simplest ways to wipe out credit card, medical or other unsecured debts.
• In Chapter 7 bankruptcy the trustee will collect all of the debtor’s assets and sell any non-exempt assets.
• Michigan Exemptions – in the Michigan Chapter 7 there is a list of “Bankruptcy exemptions”. In most cases the debtor’s property is exempt so when you file for bankruptcy under Chapter 7 you are allowed to use Michigan state laws i.e. “exemptions” to safeguard your personal property. The trustee may sell your property only if it is worth more than what the exemption amount is.
• Non-Dischargeable Debts – there are some debts such as child support, alimony, student loans or some types of taxes that cannot be discharged in Chapter 7 in Michigan bankruptcies which means that you will still be accountable for paying these debts even after your discharge.
• Reaffirmation Agreement – if you sign a voluntary “reaffirmation agreement” you might be permitted to keep certain secured debts such as your furniture, car or house, however if you decide to do that you cannot wipe-out this debt again for another eight years – you will still owe it and will be obliged to continue with payments.

In conclusion, if you are considering filing under Chapter 7 Bankruptcy and are a resident of the state of Michigan, you should call Firebaugh and Andrews at 734-722-2999 for a free consultation.

a1

Michigan Bankruptcy Facts

Michigan residents who find themselves overwhelmed with debt can seek relief under the federal bankruptcy laws. There are two common forms of bankruptcy for individuals: Under Chapter 7, the courts sell off all non-exempt assets to pay off as much of your debt as possible and under Chapter 13, you keep all or most of your assets but must create a court-approved plan to pay off your debts over time. Although bankruptcy is handled in the federal courts, some of the details vary based on your being a Michigan resident.

District Bankruptcy Courts in Michigan

Michigan’s bankruptcy court is divided into the Eastern District, with the main court in Detroit, and the Western District, with the main court in Grand Rapids. Each district also has divisional offices where you may file so long as you file in the district where you live.

Can I File Chapter 7 Bankruptcy?

You may file Chapter 7 bankruptcy if your average monthly income for the six months before you file is less than Michigan’s median income for a family of your size. For example, if you are married with two children, you must earn less than Michigan’s median income for a family of four, which is $6,037 monthly for 2012. If you make more than this, you must pass a stringent means test to qualify for Chapter 7.

How Long Is a Chapter 13 Repayment Plan?

The amount of time you must spend paying your creditors also depends on your income as compared to Michigan’s median income. For example, if you make less than the median income, your repayment plan will usually be up to three years. If your income matches or exceeds the state median, your plan will be five years, unless you’re able to pay off all unsecured debt in less time.

Can I Keep My House and Car?

Both federal and state laws allow you to exclude certain personal property from your bankruptcy case. Michigan lets you choose whether to use the state or the federal exemptions, but you must pick one or the other, you cannot mix and match from both lists.

The federal and state lists include similar exemptions, although specific items and values vary. Some of these exemptions include:

  • Personal items such as family pictures, clothing, jewelry, and household goods
  • Public benefits
  • Retirement accounts
  • Tools of your trade

Exemption values for your home and car also differ. Michigan adjusts the dollar value of exemptions every three years. As of 2011, the state allows a homestead exemption up to $35,300 of equity or $52,925 for people aged 65 or older or disabled. The federal exemption is $21,625 or $43,250 for married couples filing jointly. The state allows you to keep up to $3,250 of equity in one vehicle, while the federal vehicle exemption is $3,450.

If you have moved to Michigan within two years prior to filing for bankruptcy, you must use the exemptions from your previous home state.

Call us today to get your free consultation 734-722-2999

help

Michigan Bankruptcy Chaper 7 & 13 facts and requirements.

Michigan residents who find themselves overwhelmed with debt can seek relief under the federal bankruptcy laws. There are two common forms of bankruptcy for individuals: Under Chapter 7, the courts sell off all non-exempt assets to pay off as much of your debt as possible and under Chapter 13, you keep all or most of your assets but must create a court-approved plan to pay off your debts over time. Although bankruptcy is handled in the federal courts, some of the details vary based on your being a Michigan resident.

District Bankruptcy Courts in Michigan

Michigan’s bankruptcy court is divided into the Eastern District, with the main court in Detroit, and the Western District, with the main court in Grand Rapids. Each district also has divisional offices where you may file so long as you file in the district where you live.

Can I File Chapter 7 Bankruptcy?

You may file Chapter 7 bankruptcy if your average monthly income for the six months before you file is less than Michigan’s median income for a family of your size. For example, if you are married with two children, you must earn less than Michigan’s median income for a family of four, which is $6,037 monthly for 2012. If you make more than this, you must pass a stringent means test to qualify for Chapter 7.

How Long Is a Chapter 13 Repayment Plan?

The amount of time you must spend paying your creditors also depends on your income as compared to Michigan’s median income. For example, if you make less than the median income, your repayment plan will usually be up to three years. If your income matches or exceeds the state median, your plan will be five years, unless you’re able to pay off all unsecured debt in less time.

Can I Keep My House and Car?

Both federal and state laws allow you to exclude certain personal property from your bankruptcy case. Michigan lets you choose whether to use the state or the federal exemptions, but you must pick one or the other, you cannot mix and match from both lists.

The federal and state lists include similar exemptions, although specific items and values vary. Some of these exemptions include:

  • Personal items such as family pictures, clothing, jewelry, and household goods
  • Public benefits
  • Retirement accounts
  • Tools of your trade

Exemption values for your home and car also differ. Michigan adjusts the dollar value of exemptions every three years. As of 2011, the state allows a homestead exemption up to $35,300 of equity or $52,925 for people aged 65 or older or disabled. The federal exemption is $21,625 or $43,250 for married couples filing jointly. The state allows you to keep up to $3,250 of equity in one vehicle, while the federal vehicle exemption is $3,450.

If you have moved to Michigan within two years prior to filing for bankruptcy, you must use the exemptions from your previous home state.

Information Is Not Advice

This article provides a general overview of bankruptcy in Michigan, but it is not legal advice. You should contact a Firebaugh and Andrews bankruptcy attorney for specific information related to your unique situation for a free consultation 734-722-2999

aps

Corporate Bankruptcies: The Relationship between Chaper 7 & Chapter 11 Bankruptcy

There is no direct relationship between Chapter 7 and Chapter 11. But when it comes to corporate bankruptcies there can set a relationship between the two bipolar Chapters.
The U.S. Security and Exchange Commission (SEC) define Chapter 7 as taking the business out of its all operations and turning it into an asset. The asset is sale off through an appointed committee and the one, investors or creditors, who take the least risks, are paid first. Chapter 11, while on the contrary, keeps the business in the running state and allowing it to pay the creditors by re-planning or rephrasing its financial acts.

aps

Continue reading