Navigating your way around seemingly unending financial troubles can be torturous. Determining whether bankruptcy is the best solution for your specific situation is something that a lawyer can help with. Luckily, it isn’t difficult to find a competent bankruptcy attorney in Sterling Heights. With some help, you’ll be able to navigate the process of filing for bankruptcy in Michigan and finally eliminate the debt that has caused you so much distress.
Requirements for Bankruptcy in Michigan
Before you file for bankruptcy in Michigan, you’ll need to compile all the necessary financial documents. These documents will be used not only by your Sterling Heights lawyer to evaluate your situation, but also in the actual filing of your bankruptcy case. Generally, these are what you should prepare:
- Social Security & Identification – Your Social Security card is critical to filing your case. Plus, you need a valid photo ID to verify your Social Security. Valid IDs include your Michigan state identification, driver’s license, or any other identification card issued by the United States government.
- Income & Tax Documents – All the documents pertaining to your current income as well as your aggregate earnings within the last six months. You’ll also need to prepare your tax documents from the last two years.
- Checking, Savings, & Credit Card Statements – Prepare a certified record of all your bank accounts within the last six months. That should include statements for any credit cards you may have.
- Property Ownership & Valuation – Proof of ownership for your Sterling Heights home, if it is in your name. Include any other properties you own, including other real estate, cars, and recreational vehicles. Include records reflecting their value.
- Retirement Plans & Other Investments – Your 401k or any other pension plan. Also include other investments like life insurance plans and stock certificates.
Chapter 13 and 7: Types of Bankruptcy in Michigan
Although the laws are the same in every state, Michigan sets its own income levels for qualification. Properties that are exempted from liquidation are also state-specific. Before the actual filing, your Sterling Heights bankruptcy attorney will evaluate your case and determine what type you qualify for. In general, your two options are chapter 13 and chapter 7.
Chapter 13 Bankruptcy: Reorganization
Chapter 13 is the most common type filed by individuals, especially when properties are involved. Also called an individual debt adjustment or debt reorganization, this type of bankruptcy allows you to settle your arrears in manageable monthly payments. Legally, it’s possible to spread your payments up to a maximum of 60 months.
When filing for this type of bankruptcy, it’s essential to have proof of a regular income that can accommodate a reasonable repayment plan. Otherwise, your case will likely be discharged. However, if you do qualify, chapter 13 gives you a better chance of keeping your properties, including your Sterling Heights home.
Chapter 7 Bankruptcy: Elimination
Also called Liquidation, this type of bankruptcy makes it possible to wipe out your debt by entrusting your properties to the court and allowing them to sell those assets for the benefit of your creditors. The value of your properties might not be enough to cover your entire debt, but it at least allows your creditors to recover a portion of the total amount.
With the help of a competent bankruptcy attorney, you can also qualify for chapter 7 bankruptcy even if you don’t have any assets to liquidate. In fact, a good lawyer can help you retain certain properties as long as they are exempted in the state of Michigan.
How Does the Bankruptcy Process Take Place in Michigan?
Before you actually file for bankruptcy, you’ll have several meetings with your lawyer. The goal would be to determine the right strategy and make sure all the necessary documents are in order. If your Sterling Heights bankruptcy attorney determines that your best chance is to file for chapter 13, you’ll also develop an ideal repayment plan together. For chapter 7, you’ll both determine which assets can be saved from liquidation and prepare the documents necessary to make that possible.
Once everything is in order, your lawyer will file your documents at a Michigan bankruptcy court and await the schedule for a meeting with your trustee. Your trustee is a person assigned by the court to verify your financial documents and any claims you made in your filing. Based on their evaluation of your case, they will make recommendations to the judge who will decide on your case.
The process doesn’t typically end after your face-to-face meeting with your creditor. Your attorney and your trustee might correspond for several weeks after that. During that time, you might need to present additional evidence to support your claims. From the time you file, it might take several months before the court releases a decision on your case. Nevertheless, your creditors will be prohibited from trying to collect from you throughout this entire process.
The Value of a Competent Sterling Heights Bankruptcy Attorney
Of course, hiring a competent attorney is always important. For the Michigan bankruptcy process specifically, having a good lawyer could be the difference between a dismissed case and a completely discharged debt without the need for liquidation.
The role of your bankruptcy attorney isn’t just to identify the type to file for and make sure that all your documents are in order. A lawyer that’s experienced and competent in these proceedings will know exactly what to prepare for a good outcome. Additionally, they should determine which assets you can keep based on federal bankruptcy laws and exemptions set by the state of Michigan. Should the trustee disagree, your lawyer needs to have enough confidence to stand firm and fight for your rights as well as present additional evidence that might help your case. Without this level of service, you’re no better off than filing on your own.
Hiring a bankruptcy attorney in Sterling Heights could be your first critical step to finally eliminating the debt that has caused you so much anguish. Although the process of filing for bankruptcy in Michigan is undeniably overwhelming, having an experienced lawyer at your service should allow you to rest easy and be confident that you’re steps away from a debt-free life.