Bankruptcy FAQs


Bankruptcy Basics


I don’t want to include certain debts in my bankruptcy – can I do that?


By law, all debts must be listed in your bankruptcy petition. This includes debts for assets you want to keep, such as your house or car; debts that are generally non-dischargeable, such as taxes; medical bills; credit cards; and debts to family members or friends. While you are usually allowed to keep your secured debts (link to “what is a secured debt”) if you have sufficient income, they are reasonable and necessary expenses, and you don’t fall behind on payments, with unsecured non-priority debts (link to “what is an unsecured debt”) a debtor cannot pick and choose what he/she wants to keep – they must discharge them all.


What is a secured debt? How is it treated in a bankruptcy?


A secured debt is a debt that is attached to a piece of property, such as a mortgage on a house or a loan on a car. In order to keep a secured debt, it must be considered reasonable and necessary, you must have income to be able to afford it, and you cannot fall behind in payments. In a chapter 7 bankruptcy, a secured debt for personal property (not real property, such as a house) must be reaffirmed (link to “what is a reaffirmation agreement”) in order to keep it. In a chapter 13, you do not need to reaffirm debts. If you cannot afford the property, do not have the income to pay it, and/or the property isn’t reasonable and necessary, you are able to give the property back in the bankruptcy and lose the debt after discharge.
If a secured debt is not perfected, you may be able to discharge the debt and keep the property without having to make the remaining payments. This is done by avoiding the lien, and is specific to each situation. If you think you may have a case where you can avoid a lien, you can contact The Kemp Law Firm, PLLC, at 248-529-6849 for specific advice.


What is a reaffirmation agreement?


A reaffirmation agreement is where a debtor agrees to keep paying on a secured debt (link to “what is a secured debt”) during and after the bankruptcy case in order to keep the property. The reaffirmation agreement is signed by the creditor, the debtor, and the debtors attorney, and gets filed with the court within 45 days of the 341 Hearing.
However, a debtor can reaffirm a debt that is technically discharged post-bankruptcy by agreeing to pay it with the creditor, or beginning repayment. This may make the debtor once again legally liable for that debt, and shouldn’t be done without consulting a bankruptcy lawyer.


What is an unsecured debt?


An unsecured debt is a debt that is not attached to property (link to “what is a secured debt”), nor is it a priority debt (link to “what is a priority unsecured debt”). The most common examples of unsecured debts are credit cards and medical bills. These debts generally cannot be reaffirmed (link to “what is a reaffirmation agreement”), so they all become discharged in the bankruptcy once discharge is granted.


What is a priority unsecured debt?


A priority unsecured debt is a debt that is unsecured (link to ‘unsecured debt’), but is given a higher status than regular unsecured debts because of the nature of the debt. These are generally non-dischargeable, although may be in certain cases. The most common examples of priority unsecured debts are real estate taxes, personal property taxes, income taxes, criminal restitution, civil damages owed for such things as DUI/OWI causing injury, personal injury damages, and fraud.


What is does a bankruptcy discharge do?


Near the end of both chapter 7 bankruptcies and chapter 13 bankruptcies, the court grants a discharge. A discharge of debts means that you no longer owe on the dischargeable debts you listed on your petition that were not reaffirmed.
In a chapter 7 bankruptcy, discharge occurs after the 341 hearing, after the period for objections to discharge has passed (without objections or with resolved objections), and before the case is closed.
In a chapter 13 bankruptcy, discharge occurs after the 341 hearing, after the plan is confirmed, and after all plan payments have been made.


What is credit counseling and debtor education? Do I have to do it?


Under the bankruptcy laws, a debtor must complete a credit counseling course and receive a certificate from an approved agency prior to filing their bankruptcy petition (in both a chapter 7 bankruptcy and a chapter 13 bankruptcy).  This course may last you between 30 minutes and 2 hours, and may be taken online, over the phone, or in person.  The credit counseling course goes over income, debts, and setting a budget, among other things.
After the 341 hearing (or before discharge, for a chapter 13 bankruptcy), the debtor(s) must file a debtor education certificate, or the case will be dismissed without discharge. This class is very similar to the credit counseling course.


Can creditors call or sue me after filing bankruptcy?


The moment a bankruptcy case is filed (any chapter), an automatic stay is put into place. The “stay” is a protective device made by the courts to shield the debtor(s) from creditors. During the stay, a debtor cannot be contacted by a creditor (unless the creditor does not have an attorney representing them), sued, garnished, have property seized or repossessed, or be foreclosed on unless the creditor gets permission for the court (done via a “Motion to Lift the Automatic Stay”). The Motion is only used to recover property, such as a house, car, or other secured property, and does not allow the creditor to sue you during the bankruptcy (with some exceptions; see “adversary proceedings”). While the stay goes into effect immediately, the creditors may not get notice of the filing/stay for a few weeks. This is because the Court issues notices via U.S. Postal Service, and it takes time to have them mailed out and processed. Because of this delay, you may still get calls, collection letters, or garnishments during this window. We advise our clients to answer creditor calls and have the creditor contact us directly. Usually once a creditor has a case number they will no longer contact the debtor.

 
What is an adversary proceeding?


An adversary proceeding is a lawsuit within the bankruptcy. Because the Bankruptcy Court has jurisdiction during the pendency of a bankruptcy case, any litigation that occurs must go through the Bankruptcy Court.
Our most common adversary proceeding is filed by the Debtor (via our office) to discharge student loans. Adversary proceedings may also be filed by creditors in order to try to claim non-dischargability for debts, such as debts incurred by fraud. The Trustee may also file an adversary proceeding in certain instances.


What is a 2004 Deposition?

 

Occasionally, the bankruptcy trustee does not have enough time to ask you all of the questions that he or she wants to ask during the 341 hearing. Or, the trustee hears something you testify about, or sees something in your bankruptcy filings that causes him or her to want more information. The Rule 2004 Deposition, or 2004 Exam allows the trustee to ask further questions without the time constraints of the 341 hearing. Creditors may also ask for this type of examination, but most don't, absent a very good reason.


Can I discharge my student loans in a bankruptcy?


Sometimes.  In order to discharge student loans in a chapter 7 or chapter 13 bankruptcy, a debtor must meet a very strict hardship test. For more information, CLICK HERE to go to our page that discusses discharging student loans in a bankruptcy.


Can I get rid of my second mortgage in a bankruptcy without giving up my house?


Only in a chapter 13 bankruptcy. In a chapter 13 bankruptcy, a debtor may be able to do a lien strip. A lien strip is where the second mortgage, or home equity loan (HELOC), is discharged while the debtor retains the house and the mortgage. In order for this to be successful, the second mortgage has to be wholly unsecured. This means that there can be no equity in the house touching the second mortgage.
For example, let’s say Sam has a house valued at $100,000, with a first mortgage of $110,000, and a second mortgage of $25,000. Because Sam’s house is under water by $10,000 with the first mortgage alone, there is no equity touching the second mortgage. Sam may be able to do a lien strip on his second mortgage.
Because of the importance of the home value in a lien strip, we strongly recommend that our clients get an appraisal done by a licensed appraiser prior to filing their bankruptcy petition.


What if my mortgage was never recorded at the Register of Deeds?


If a mortgage was never recorded at the Register of Deeds, it was not perfected; thus, you may be able to discharge the mortgage as an unsecured debt, and still keep your house. When this occurs, it is very unlikely that you will have enough exemptions (link to “what is an exemption”) to cover your new equity. While this isn’t usually an issue in a chapter 13 bankruptcy, it is in a chapter 7 bankruptcy, and usually requires that a chapter 7 case convert to a chapter 13 (see “What is a Conversion” - link). If you think you may be able to avoid a lien on your house, it is best to contact a lawyer who knows the intricacies of the Bankruptcy Code. The Kemp Law Firm, PLLC, is available 24/7 at Zach@TheKempLawFirm.com or at 248-529-6849.


What is an exemption?


An exemption is an amount that the law allows you to keep for specific property. This varies by jurisdiction. For example, as of the time of this writing, in Michigan, you are allowed to exempt 100% of your qualified retirement account and $22,975 of the equity in your principal residence for an individual debtor (or $45,950 total for joint debtors). There are certain exemptions covering everything from equity in an automobile to child support payments to wrongful death proceeds.
If you are unable to exempt your property in a chapter 7 bankruptcy, you may risk losing it to the trustee, who will put it in the bankruptcy estate, sell it, and distribute it to creditors. You may also be given the option of paying the trustee the nonexempt amount in order to keep it.
Exemptions generally aren’t a concern in a chapter 13, as assets are usually fully protected in a chapter 13 bankruptcy (subject to exceptions).   


What is a conversion?


A conversion, in the context of bankruptcy, is when a case is changed from a chapter 7 bankruptcy to a chapter 13 bankruptcy, or vice versa.


What determines whether I can file chapter 7 bankruptcy versus a chapter 13 bankruptcy?


When determining what chapter of bankruptcy a debtor is eligible for, we have to analyze several things, including:

  1. The debtors income, including income of the spouse, regardless of whether it is an individual or joint filing. We have to include all income, including: wages, tips, bonuses, profit sharing, SSI/SSDI, child support, spousal support, unemployment compensation, and any other type of income.
  2. The debtors reasonable and necessary household expenses, including those of the debtors spouse if filing individually
  3. The debtors assets
  4. The debtors liabilities, including the total amount of debt
  5. If and when the debtor(s) filed a previous bankruptcy
  6. Other aspects unique to each case

 

How and when can I discharge income taxes in a bankruptcy?


A debtor may be able to discharge income taxes in a chapter 7 or chapter 13 bankruptcy if the taxes we filed more than 3 years prior to filing bankruptcy (including any amendments to the tax return). The debtor may also have to meet other criteria depending on the case.


Will I ever be able to get a mortgage after filing bankruptcy?


Most people use a bankruptcy to give themselves a new start, and start rebuilding credit as soon as their case is closed. If a debtor works to rebuild their credit and takes precautions to not fall into debt, it is likely that they will be able to get a mortgage after a bankruptcy. Most lending institutions require a debtor be 2 years out of a chapter 7, but each lending institution has their own requirements.


What is a 341 Hearing (a/k/a “Meeting of Creditors”)? What happens at it?


A 341 Hearing is usually the only hearing in a chapter 7, and is the first hearing in a chapter 13. This hearing occurs after the petition has been prepared, reviewed, and approved by a debtor in our office. We generally receive a court date within a few days of filing. Unfortunately, the court assigns dates, and they can’t be guaranteed by our office (or any office). The 341 Hearing is held in front of a bankruptcy trustee, who is an attorney that works with/for the Bankruptcy Court, but is not a judge. At the hearing, the debtor(s) meet first with the attorney and, depending on the trustee, may have to complete a short questionnaire prior to being called.
Once the trustee calls the case, the debtors and attorney sit down at a large conference table with the trustee and the trustee’s assistant. There is no judge and it is not held in a courtroom. The debtors must show their valid state issued ID, as well as their Social Security Cards. The trustee will ask several questions, including asking whether the debtor(s) filed taxes for the last 2 years, whether the petition is true and accurate to the best of their knowledge, and usually other questions specific to the case. When a client does not have an attorney, this hearing can take quite awhile (we’ve seen pro se cases have hearings over an hour long), and be rather difficult. Our hearings generally take between 5-15 minutes. After the trustee questions the debtors they will either conclude the hearing or continue it by setting a control date for the continued hearing to be held. A hearing is usually only continued if the trustee requires additional documentation from the debtors, and once the documentation is provided the control date is cancelled.


Will someone from the Court or Trustee’s office come look at my house?


While it is always possible that a trustee or their staff may drive by your house if it’s on a public road, it is highly unlikely they would do it on purpose. We have never seen a case where anyone from a trustees office has gone to a debtors house unannounced.


My house is in pre-foreclosure and I have a date for a Sheriff’s sale – what can I do to keep my house?


If you file your bankruptcy before the Sheriffs sale, the automatic stay would temporarily stop the foreclosure; however, they may continue the foreclosure process by Motioning to Lift the Automatic Stay (see “Can creditors call or sue me after filing bankruptcy?”).
When the debtor(s) want to keep the house, in both a chapter 7 and a chapter 13, we attempt to negotiate with the creditors to stop the Sheriffs sale. We have a high success rate of negotiating/modifying mortgages that are in pre-foreclosure.
Debtor(s) have more ability to keep their house in a chapter 13 than a chapter 7, as a chapter 13 allows for the debtor(s) to make up arrears (payments that are behind) in the chapter 13 repayment plan – creditors usually don’t fight this. 

My house has been sold at Sheriff’s sale – what can I do to keep my house in a bankruptcy?
Unfortunately, if the house has already been sold in Sheriff’s sale, you have lost your ownership interest in it. By law, you have a six month redemption period (on a single family dwelling) in which you can pay off the loan completely, or move.
It is always worth trying to work with the lender/creditor to see if they will allow you to keep the house, but this usually only works if your mortgage company bought the house themselves in the Sheriff sale.


I owe a lot of money for losing a personal injury/drunk driving case – can I discharge it in a bankruptcy?


No.


I was convicted of fraud and owe money – can I discharge that in a bankruptcy?


No.


I owe criminal restitution – can I discharge that in a bankruptcy?


No.

 

Do I have a right to file bankruptcy?


Many people do not realize that bankruptcy is a constitutional right to all U.S. citizens. Article 1, Section 8, Clause 4 states “Congress shall have the power…To establish…uniform laws on the subject of bankruptcies throughout the United States.”
However, there are limits to who can file and when. For example, a person may only file a chapter 7 every 8 years (to get a discharge), there are debt limits, income limits, etc.  The only way to know if you qualify for bankruptcy, whether it be a chapter 7, chapter 11, or chapter 13, is to consult with a lawyer who specializes in bankruptcy, such as attorney Zach Kemp.


I own a business – how will filing a personal bankruptcy effect my business?


It depends on whether you are operating as a d/b/a or are incorporated. In either case, your personal guarantee on any loans for the business may be discharged, thus relieving you of any personal liability, but in the case of a corporation, the business may still be liable.
If you are operating a d/b/a, it may dissolve your business.
You may not be able to take out loans during or immediately after the bankruptcy for your business.
There are many possible effects on a business from an owner filing a personal bankruptcy, and each case is unique. If you would like specific advice, you can call us at 248-529-6849 for a free consultation.  


What types of debt are commonly discharged in bankruptcy?


Credit card debt, medical debt, mortgages, foreclosures, car loans, repossessions, drivers responsibility fees, cash advances (with certain restrictions/limitations), and judgments from lawsuits are all commonly discharged in bankruptcy.


Is a bankruptcy filing public record?


Yes. However, in order to obtain information on a bankruptcy case, such as the petition, a person must sign up for a service, pay money, know certain information, etc. – basically, it’s not as easy as simply “Googling.”


I don’t want to tell the trustee about all of my property or assets because I don’t want to risk losing them – is that OK?


No. Attempting to hide or not disclose assets, including transferring assets in an attempt to hide them, is considered fraud, and can result in various consequences. These consequences include, but are not limited to, dismissal without discharge, 2004 Depositions, adversary proceedings, avoidance of transfers by the trustee, and criminal charges.
A debtor signs their petition under oath stating that everything is true and accurate to the best of their knowledge. A debtor should always be honest and open about everything with their attorney.


Chapter 7 Bankruptcy


Why should I file a chapter 7 bankruptcy?


Everybody has a different reason for filing a chapter 7 bankruptcy. Many people have hit hard times, such as medical crises or job loss, and have had to resort to loans and credit lines in order to make ends meet. Some people have found themselves in over their head in debt, others get “stuck” with additional debt in divorce or from a lawsuit. Filing a bankruptcy is a last resort, only to be used when there is no chance of paying back all of the debt. In almost every case, the person filing wants to be able to have a fresh start debt-free and escape from the stress that mounting bills and collection calls causes.

What will happen to my 401k/IRA in a chapter 7 bankruptcy?


A retirement account such as an IRA, 401k, or 403B is 100% protected in a bankruptcy – as are pensions and child support.
Will my 401k contributions affect my chapter 7 bankruptcy?
Possibly. If you contribute enough to your retirement account that it impairs your ability to pay your creditors, the trustee may require you to cease payments to your retirement account and convert to a chapter 13.
For example, if Matt contributes $100.00 every weekly pay period to his 401k, but shows no disposable income at the end of the month after his bills are paid, the trustee will likely require that Matt convert to a chapter 13 and pay that $100.00 to his creditors instead. However, the trustee still cannot take what Matt has in his 401k – that remains protected.


I have a 401k loan – what happens with that?


In a chapter 7 bankruptcy, you generally cannot repay 401k loans, for the same reasoning as contributing to a 401k – if you can use any funds to repay creditors, you must do so.


Will I lose all of my property in a chapter 7 bankruptcy?


No. Most of the time a debtor doesn’t lose any property, so long as it can be exempted. An exemption is an allowed value in a piece of property. For example, retirement accounts and pensions have unlimited exemptions – the trustee cannot take this money. There are allowances for a person’s primary residence, car, jewelry, tools of trade, and more.


What happens if my income goes up during my chapter 7 bankruptcy?


Any time your income changes it should be reported immediately to your bankruptcy lawyer.


What happens if my income decreases during my chapter 7 bankruptcy?


Any time your income changes it should be reported immediately to your bankruptcy lawyer.


Can I keep my car and/or house in a chapter 7 bankruptcy?


Most of the time, you can keep all of your property. This depends on a few variables: how much income you have, how much your other bills are, if you can truly afford payments on the loans, if you can exempt (protect) the equity in the property, and other aspects. The only way to know for sure is to consult with an experienced bankruptcy lawyer, such as Zach Kemp.


What is the process for a chapter 7 bankruptcy?


Filing a bankruptcy is complicated, and can be confusing. Every case is different, but the basic steps are the same.
First, you meet with the bankruptcy lawyer, Zach Kemp, to go over your finances, property, and other things. The initial consultation is always free at The Kemp Law Firm.
Second, we give you a list of documents that the trustee/court requires when you file. We will work with you in person, over the phone, and via email and fax to make sure the proper documents are received and submitted to the court after filing.
Third, we draft and complete the petition using the information you give us at the initial consultation and the documents received then and later on. At this time you do your credit counseling course, which is done online or via phone and takes about an hour. This course provides you with a certificate, which must be included in the petition at the time of filing.
Fourth, you meet again with attorney Zach Kemp to review your petition to make sure it is a complete and accurate reflection of your information. If you approve of the petition, you will sign off on it and we will file it immediately with the court.
Fifth, you and the lawyer will attend your 341 hearing, either in Detroit, Flint, Bay City, or other location. The court depends on where you live, and we can tell you which court you have during your initial consultation. This hearing is very short, usually lasting 5-10 minutes, and is held in a conference room with the trustee. There is no judge, and it is not the typical courtroom.
Sixth, after your hearing you complete a debtor education course, which is similar to the first counseling course taken before filing the petition. If this is not submitted to the court within a certain time frame post-filing, your case will be dismissed. This is also the time that you will execute (agree to and sign) any reaffirmation agreements, which allow you to keep your secured debt (such as a mortgage or car loan).
Seventh, so long as there are no other issues, the trustee will issue a discharge and then close the case. Depending on the trustee, and how far behind schedule they are, this may happen shortly after the debtor education certificate is filed, or it may take several months.
Eighth, there is a continuing obligation to report certain changes, such as winning the lottery or receiving a large inheritance, for six months after the case is closed.  

 
How will filing a chapter 7 effect the creditors that are suing me?


Until your bankruptcy is filed, creditors can sue you, obtain a judgment, and garnish your wages, tax refunds, and bank accounts, and can also seize your property. The moment you file your petition the automatic stay goes into effect, which protects you from creditors. Once the stay is in place, the lawsuits are put on hold and the garnishments have to stop. 


Can I get garnished money or seized/repossessed property back in a chapter 7?


The Kemp Law Firm has had great success in recovering money and property taken from creditors. There are certain requirements, including when the property was garnished/seized, the value of it, etc., that must be met in order to recover the money or property. To find out if this could benefit you contact us at (248) 529-6849 or Zach@TheKempLawFirm.com 24 hours, 7 days a week to discuss your individual needs.


Chapter 13 Bankruptcy


Why should I file a chapter 13 bankruptcy?


The reasons are mostly similar to filing a chapter 7 bankruptcy - everybody has a different reason for filing. Many people have hit hard times, such as medical crises or job loss, and have had to resort to loans and credit lines in order to make ends meet. Some people have found themselves in over their head in debt, others get “stuck” with additional debt in divorce or from a lawsuit. Filing a bankruptcy is a last resort, only to be used when there is no chance of paying back all of the debt. In almost every case, the person filing wants to be able to have a fresh start debt-free and escape from the stress that mounting bills and collection calls causes.
However, a chapter 13 can be utilized in ways that a chapter 7 can’t. For example, if you are close to being foreclosed on (pre-Sheriff sale) due to being behind on house payments, you can use the chapter 13 to catch up on payments and stop the foreclosure.
You can also use a chapter 13 to do a lien strip. A lien strip removes a second mortgage, so long as it is completely “under water.”
If you think you may be interested in doing a lien strip or catching up on house payments to avoid foreclosure, contact bankruptcy lawyer Zach Kemp at (248) 529-6849 or email at Zach@TheKempLawFirm.com.

 

Bankruptcy Basics for Chapter 7s and Chapter 13s


I owe a friend/family member money – should I pay them off now?


No. If you pay a friend or family member you must inform the trustee of the payment, and the trustee will likely make your friend or family member repay that money to the court.


I gave away property before filing – will that effect anything in my bankruptcy?


Possibly, depending on who you give it to, why you gave it away, what the property is, and what its value is.


What will happen to my 401k/IRA in a chapter 13 bankruptcy?


In a chapter 13, as with a chapter 7, your 401k, IRA, 403b, and other recognized retirement account will be completely protected, so you will keep it.


I have a 401k loan – what happens with that?


In a chapter 13, you are allowed to continue paying on a 401k loan. This is different than a chapter 7.


What happens if my income decreases in a chapter 13 bankruptcy?


If your income decreases in a chapter 13 bankruptcy, you should notify your bankruptcy lawyer immediately.
If you still qualify for a chapter 13, you need to amend the plan in order to reflect the change in income. If you do not modify the plan, you will end up being unable to afford your plan payments, could fall behind in plan payments, and end up getting your case dismissed without discharge. 
If your income falls under the limits for a chapter 7 bankruptcy, and you meet other requirements, you may be able to convert to a chapter 7 and obtain a discharge without having to repay debts.


What happens if my income increases in a chapter 13 bankruptcy?


If your income increases in a chapter 13 bankruptcy, you should notify your bankruptcy lawyer immediately. You must modify the chapter 13 plan, which usually results in a higher plan payment. If you do not notify the trustee of the increase in income, the trustee may deny discharge or require that you pay the difference all the way back to the date the income first went up.


How much will I have to pay in a chapter 13 bankruptcy?


This depends on what your expenses and income are. In order to get an accurate estimate of what your plan payment would be, you would need to meet with an experienced bankruptcy attorney, such as Zach Kemp.


What does the Trustee look at to determine allowable expenses in a chapter 13 bankruptcy?


A trustee must consider whether an expense is reasonable and necessary, and is based largely on a case by case basis. Some expenses that a trustee will usually consider to be allowable are mortgages and car payments (with some exceptions), student loans, utilities, food, transportation and auto maintenance, medical co-pays and expenses, childcare, and insurance (auto, home, medical, life, etc.).


What is the process for a chapter 13 bankruptcy?


First, you meet with the bankruptcy lawyer, Zach Kemp, to go over your finances, property, and other things. The initial consultation is always free at The Kemp Law Firm.
Second, we give you a list of documents that the trustee/court requires when you file. We will work with you in person, over the phone, and via email and fax to make sure the proper documents are received and submitted to the court after filing.
Third, we draft and complete the petition and plan using the information you give us at the initial consultation and the documents received then and later on. At this time you do your credit counseling course, which is done online or via phone and takes about an hour. This course provides you with a certificate, which must be included in the petition at the time of filing.
Fourth, you meet again with attorney Zach Kemp to review your petition and plan to make sure they are a complete and accurate reflection of your information. If you approve of the petition and plan, you will sign off on it and we will file it immediately with the court.
Fifth, you and the lawyer will attend your 341 hearing, either in Detroit, Flint, Bay City, or other location. The court depends on where you live, and we can tell you which court you have during your initial consultation. This hearing is very short, usually lasting 5-10 minutes, and is held in a conference room with the trustee. There is no judge, and it is not the typical courtroom.
Sixth, you will attend your first confirmation hearing. This is where the details of the plan, such as duration and payment amount, will be worked out with the trustee. There is frequently more than one confirmation hearing.

Seventh, after your hearings you complete a debtor education course, which is similar to the first counseling course taken before filing the petition. If this is not submitted to the court within a certain time frame post-filing, your case will be dismissed. This is also the time that you will execute (agree to and sign) any reaffirmation agreements, which allow you to keep your secured debt (such as a mortgage or car loan).
Eighth, so long all payments have been timely made and there are no other issues, the trustee will issue a discharge and then close the case. Depending on the trustee, and how far behind schedule they are, this may happen shortly after the debtor education certificate is filed, or it may take several months.
Eighth, there is a continuing obligation to report certain changes, such as winning the lottery or receiving a large inheritance, for six months after the case is closed.  

 

How will filing a chapter 13 effect the creditors that are suing me?


Until your bankruptcy is filed, creditors can sue you, obtain a judgment, and garnish your wages, tax refunds, and bank accounts, and can also seize your property. The moment you file your petition the automatic stay goes into effect, which protects you from creditors. Once the stay is in place, the lawsuits are put on hold and the garnishments have to stop. 


Debt Negotiation


I don’t have much debt, but I don’t have the money to pay my bills. Should I file bankruptcy?


Bankruptcy is a last resort, and frequently people assume it is their only way out. Many bankruptcy lawyers will push people into filing bankruptcy because they simply don’t want to attempt to negotiate with creditors. There are times where bankruptcy can be avoided, and times where it can’t. To find out your best option contact attorney Zach Kemp at (248) 529-6849 or Zach@TheKempLawFirm.com 24 hours a day, 7 days a week.

 

 

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