Frequently Asked Questions
Have a question about bankruptcy? Click on one of the questions below for the answer:
What can I include?
What can’t I include?
Should I keep making payments?
Dealing with collection calls
What do I need to send in?
When do garnishments stop?
How much will it cost me?
Will I lose my house/car?
Does my spouse have to file?
What is the difference between Chapter 7 and Chapter 13?
What can I include
Credit cards, medical bills, judgments, garnishments, “pay day” loans (some restrictions apply), past due balances on foreclosed or repossessed property, personal loans, etc.
What can’t I include?
Student loans, Michigan Driver Responsibility Fees, taxes owed to local, state or federal government, Child Support, Alimony, and certain other debts. Please contact our office to discuss dischargability of various items in your own personal circumstances.
Should I keep making payments?
Once you make the decision to file for Bankruptcy, you should stop making payments to your unsecured creditors (credit cards, medical bills etc). In fact, there are preferential treatment guidelines which actually prohibit payments above a certain amount to any particular unsecured creditor in the 90 days prior to filing. However, you should not stop paying until you have discussed your case with our office, and determined that you are eligible to file for bankruptcy. You MUST keep payments on secured items (home, car, etc) current in order to be able to keep the items after filing for bankruptcy.
Dealing with collection calls
Once you have decided to file through our office, we give you our creditor phone number. From there, whenever you receive a collection call, all you will need to do is notify the caller that you have retained our office to file for Chapter 7 Bankruptcy, and provide them with that phone number. We will deal with them for you after that. (Please note that after your case is actually filed, ALL collection calls, letters, etc will stop, because of provisions in the federal bankruptcy code)
What do I need to send in?
Filing for Bankruptcy requires a lot of paperwork. We will send you a checklist based on your individual circumstances. However, as a general rule, you will need the following documents:
- Past 2 years of tax returns
- 6 months of back paystubs for all adults in the household
- A copy of all of your bills (and a copy of your credit report, which you can obtain for free through the federal government at www.annualcreditreport.com )
- A copy of all vehicle titles for items registered in your name
- Recorded Mortgage and Warranty Deed for any real estate which is in your name *(must be obtained from the Register of Deeds office in your county)
- Property tax statement showing the SEV (State Equalized Value) of your property
- 90 days worth of bank statements for any accounts that you are on.
When do garnishments stop?
Under the law, garnishments do not stop until your bankruptcy case has been filed. For our office, this is done after your second installment payment has been received, and you come into our office to sign your case. Any funds which are garnished AFTER your case has been filed must be returned to you immeidately.
How much will it cost me?
There are several factors which can affect the cost of a chapter 7 Bankruptcy. However, for the majority of cases, a flat fee can apply. Our office charges an Attorney Fee of $1200, and there is also the Federal Filing Fee of $299, and the credit counseling fee of $100 ($110 for a joint case). We do not charge an additional attorney fee for a joint case. Our office breaks down the total fees into 4 payments over approximately 5 months time. Please call for details.
Will I lose my house/car?
Under Chapter 7 Bankruptcy, you may keep your secured items (House, car, etc), IF you are current on the payments at the time your Bankruptcy case is filed. Our office prepares and files a Reaffirmation Agreement with the court on each of these items, allowing you to keep them and continue making the payments which you originally agreed upon with your lender.
Does my spouse have to file?
No. There are many cases in which the debt is all in one person’s name, and they are the only one which needs to file. HOWEVER, if there is a joint debt (such as a credit card) and only one spouse files, that debt will not be canceled fully in Bankruptcy, and will become the responsibility of the non-filing spouse to pay.
What is the difference between Chapter 7 and Chapter 13?
A Chapter 7 Bankruptcy is what most people think of when they hear the word “Bankruptcy”. It is a discharge of all of your consumer debts (credit cards, medical bils, etc). Under a Chapter 7, these debts are wiped out completely. You can still keep your home and vehicle when filing for a Chapter 7 (see question above).
A Chapter 13 Bankruptcy puts you into a partial repayment plan of your debts over a 3-5 year period. You prepare a budget which is approved by the court, and then make monthly payments to your Bankruptcy Trustee under that plan, and the payments are then distributed to your creditors. Please refer to the chart on this site for income guidelines to see which chapter of Bankruptcy you would most likely fall into.
(Please note that the answers to these questions are for informational purposes only. Everyone’s individual circumstance is different, and the responses here should not be construed a legal advice. Please contact our office for specific questions about your situation)