Filing for bankruptcy in Taylor, Michigan is not an easy decision to make, and neither is it a straightforward process. It requires you to understand the nuances of the law as well as how to use it to your advantage. But if you’re armed with the right information and have the support of an experienced bankruptcy lawyer, it could be the best way for you to get debt relief.
What to Prepare for a Taylor Bankruptcy Attorney
Before you file for bankruptcy in Michigan, your lawyer needs to properly evaluate your case. To do that, you’ll need to give them access to the following documents:
- Proper Identification – A valid ID issued by the government. This should be photo identification that can be used to verify your Social Security card, which you should also present.
- Tax Returns – Documents on taxes paid for the last two years.
- Income Documents – Proof of your current income and what you’ve been earning for at least the last 6 months.
- Bank Statements – A history of your accounts that shows deposit and withdrawal activity for the last 6 months. Include bills for any credit cards you may have.
- Properties – Ownership documents on all your properties. That includes real estate, vehicles, and anything that might be of value. You will also need to present documents that indicate the current value of each property.
- Investments and Retirement Plans – The latest statements for your pension plans as well as any investments that may have some cash value.
Depending on your particular situation, your attorney might ask for additional documents to prepare for your filing.
Bankruptcy Options in Taylor, Michigan
No matter where in the country you file, the bankruptcy laws are the same. However, income thresholds and exemptions are different in Michigan than in other states. Your bankruptcy attorney in Taylor should be familiar with the details. Nevertheless, your options include Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy: Debt Elimination
Chapter 7 bankruptcy is often referred to as a “liquidation” or “fresh start” program. This typically covers unsecured debt, including credit card balances, personal loans, medical bills, unpaid utilities, and some tax debts. Through this option, you have a chance of eliminating your entire debt. But, there are stringent eligibility criteria and it does come at a cost.
To qualify for chapter 7 debt relief, your documented income needs to fall within Michigan’s income threshold. If not, your bankruptcy lawyer in Taylor should evaluate you through a Means Test, which determines whether you’re trying to abuse the system. If you are deemed eligible, your attorney will determine which of your assets are protected from creditors by Michigan law and which ones will likely be liquidated. The proceeds of liquidated assets will be distributed to your creditors and you’ll be able to walk away, debt-free.
In some cases, chapter 7 can be your best option even if you don’t have any assets to liquidate or if all your properties are exempted under federal or Michigan law. It will be the responsibility of your Taylor bankruptcy attorney to protect your assets from liquidation whenever possible.
Chapter 13 Bankruptcy: Debt Reorganization
Chapter 13 bankruptcy is often called a “debt reorganization” or an “individual debt adjustment.” This program doesn’t wipe out your debt completely. Instead, it is a legal process that allows you to repay your outstanding debt over a longer period of time—typically between 3 to 5 years. So, you’ll be able to pay your creditors through manageable monthly payments.
The main benefit of this chapter is the protection of your property. If you’re in financial trouble because of a mortgage, this program will save your home or other property from foreclosure. You can also be eligible for Chapter 13 bankruptcy, even if you exceed Michigan’s income threshold. Lastly, the impact on your credit score is less severe.
Although this program doesn’t eliminate your debt, it does help you make it more manageable. As long as you honor your repayment plan, you can rest easy without having to deal with typically aggressive debt collection strategies. Most importantly, it helps you avoid losing your home.
The Bankruptcy Process
Although you’re legally allowed to go through this entire process on your own, hiring an experienced bankruptcy lawyer in Michigan gives you the confidence that you’re making the right decisions. You’ll have several meetings with your attorney, who will not only make sure that all your documents are in order and inform you of all your options but also protect your rights and assets.
Once you’re ready, your lawyer will file your bankruptcy case and your creditors will be notified. The court will then schedule a 341 Meeting (called so because it is a requirement specified in Section 341 of the Bankruptcy Code), which is commonly referred to as the Meeting of Creditors. Despite its name, creditors rarely attend, and this is more a means for your court-appointed trustee to verify the legitimacy of your filing and the accuracy of your documents.
If you’re from Taylor, your case will likely be filed at the Bankruptcy Court in Detroit. There, at 211 West Fort Street, is also where your 341 Meeting will take place. This meeting will take only a few minutes and will involve answering questions about your financial position. Typically, this is the only meeting you’ll have to attend in court. It is very unlikely that you’ll be asked to appear before a judge for a court hearing.
After this meeting, your trustee may go back and forth with your lawyer regarding additional documents and go over disagreements on exceptions. It is here where having a seasoned and competent attorney will prove most beneficial. It may take a few months before your bankruptcy discharge is released and your case is considered closed.
If you’re in Taylor, Michigan and you’re overwhelmed by debt, hiring a bankruptcy attorney could give you a chance at a clean slate. This debt resolution process doesn’t necessarily involve a complete elimination of your financial obligations. Nevertheless, it will always lead to a solution that allows you to make your situation more manageable and less stressful.