Now here is one we get calls all the time from a potential client to say well they said they would only take X amount out, then you check your bank account and instead of $200 gone they took $1200, now its your word versus their word, good luck ever getting that money back.

2) What can creditors take and not take?

Here is a law that you must be aware of and why its SO important to hire a professional like Firebaugh & Andrews to make sure you are not taken advantage of. This law is to protect those that are either on disability or SSI. Your benefits are EXEMPT from from seizure protected by federal laws. Now this is not automatic you MUST make the creditors your bank aware that your deposits in your account (the income) is from your disability or SSI payment. We have seen cases of unscrupulous debt collectors grabbing your cash, if they do take it again good luck getting your money back.

3) Never ignore lawsuits.

The majority of lawsuits that are filed end up in default judgment because the consumer never shows up. The biggest thing we hear from consumers is, ‘I can’t afford a lawyer and, gosh, I did have a Visa or a MasterCard at some point, so I don’t have any defense.’ Yes, you do. You have a defense based on who’s suing you. If it’s the original creditor, like a Citibank, it’s one story; but, if it’s a junk debt buyer, a bottom feeder, it’s a different story altogether.

But what is more important is the choosing of a bankruptcy lawyer who can file and win the title of bankrupt for his client. There are a few steps that are being highlighted below and what may help an individual in choosing a bankrupt lawyer to serve his or hers purpose. The toughest part of this whole is, choosing whether or not to file a case for bankruptcy. And if the choosing part leads to the answer yes, then that is from were the individual will feel the necessity of a bankruptcy lawyer.

Bankruptcy is actually a special area of the law, which makes it all the more important for an individual to hire a lawyer who has all the respective knowledge that is usually required in this field. Thus, the most essential and important step should be to contact the local bar association of the locality. This is usually done to take there advice before deciding upon which lawyer will the individual will entrust his case to prove him bankrupt. The individual can also choose his own lawyer and then ask the associations thoughts and concerns over this lawyer. The individual can also take recommendations from the association regarding the lawyer of his choice. As the bar keeps in touch with these lawyers, it has its views and thoughts against them, and depending upon the nature of the case the association also suggests a list of lawyers, who the association thinks are capable of handling this case.

The individuals concerned should however not restrict themselves to only what the bar says or what the individual thinks, the individual should try to gather information about the lawyer or any other lawyers by asking and inquiring to their friends, colleagues and their relatives. Or even better is if the individual can inquire to other lawyers and attorneys regarding the lawyer of his choice or any other lawyer that may suit his or hers case requirement. The individual can also search online on the web before coming to a decision and before deciding upon his choice among the lawyers. Start with Firebaugh and Andrews with over 40 years experience conveniently located in Westland, Call them today 734-722-

Here’s a couple of things to note:

1. In the world of bankruptcy exemptions, there are state and federal bankruptcy exemptions. Michigan is a state that allows you to use federal bankruptcy exemptions
2. You must have lived in Michigan for a specific period of time before the bankruptcy filing to take advantage of the Michigan bankruptcy exemptions.

Just for your reference, bankruptcy exemptions are often on the state level. So, bankruptcy exemptions in Detroit will be the same (or very similar) to exemptions in Grand Rapids.

Michigan Bankruptcy Exemptions

Below are some of the most common bankruptcy exemptions for Michigan. Let’s get into the numbers. Please note the below is the best estimate at the time of writing, but check the actual legal text for the most accurate exemption data.

Homestead Exemption

The homestead exemption is often broken down by age and whether you are married. 

• Single and under 65: $40,475
• Single is 65 or older: $60,725
• Married and under 65: $40,475
• Married is 65 or older: $60,725

Michigan specific homestead bankruptcy exemption text: “Mich. Comp. Laws Ann. § 600.5451(n). $30,000 / $45,000 if 65+ or disabled. ; property cannot exceed 1 lot in town, village, city, or 40 acres elsewhere; spouse or children of deceased owner may claim homestead exemption.” (Source)

Automobile Exemption

The automobile bankruptcy exemption in Michigan is $3,725.

Jewelry Exemption

The jewelry bankruptcy exemption in Michigan is $4,050.

Tools of Trade Exemption

The tools of the trade bankruptcy exemption in Michigan is $2,700.

Wildcard Exemption

The wildcard bankruptcy exemption in Michigan is $0.

Special Exemption Handling for Michigan

Below is specific special handling of bankruptcy exemptions in Michigan.

• Jewelry: up to $625 per item

Other Common Bankruptcy Exemptions

Here are other common exemptions. There may be limits to the amount of the bankruptcy exemption, so please be sure to check each one individually.

• 401(k) Plan
• 403(b) Plan
• IRA
• Alimony
• Annuities
• Disability Income and Benefits
• Health Savings Account
• Social Security Benefits
• Unemployment Compensation and Benefits
• Worker’s compensation

Not covered here include less common exemptions such as illness benefits, firefighter pensions, retirements involving stock. However, we encourage you to research the official Michigan legal text for more information.

Alternatives When You’re At Risk From Michigan Exemptions

You may have too much equity in a belonging, which makes you consider other options. For example, let’s say you own a boat outright that is valued at $100,000. With the wildcard exemption in Michigan, you may be at risk of losing that vehicle. 

There’s an opportunity to still do the Chapter 7 bankruptcy, but the trustee may liquidate the boat to pay off some of the creditors. You have a couple more prominent options:

Chapter 13 Bankruptcy

The Chapter 13 Bankruptcy in Michigan is called wage earner’s bankruptcy where you pay a monthly payment plan. You would be set up on a 3 or 5-year plan that would be a set monthly rate based on what you can afford. This option is generally more expensive than a Chapter 7 after legal fees, but it is a valid option for many folks who are above the exemptions

Debt Settlement:

Debt Settlement is where a company or you would negotiate a lower amount owed with the creditors directly because of the financial hardship that is preventing you from paying your bills. For example, a debt settlement company would try to negotiate a $10,000 credit bill down to $5,000. This option would still negatively affect your credit and there are fees associated with this option, but it is a valid option for many and can be quicker than a Chapter 13 bankruptcy depending on how aggressive you are with negotiating and paying off the debt.

Debt Management

Debt Management is where a company would negotiate a lower interest rate with your creditors because of financial hardship. For example, a debt management company would try to negotiate a credit card’s interest rate from 22% to 8%. This option is often the most expensive of the debt relief options and can work best for credit cards, but debt management is a valid option for many folks.

Conclusion:

Understand what items you may lose when filing bankruptcy to help you make a more informed decision. The bankruptcy exemptions in bankruptcy exemptions calculator or reach out to us directly at support@tryascend.com if you have any questions.

What is Bankruptcy Law in Michigan?

Bankruptcy law is a set of federal laws that are handled at the federal level in specific bankruptcy courts. These bankruptcy courts are responsible for all petitions filed for bankruptcy, whether it is for an individual, a company, or a municipality. During a bankruptcy case you have the chance to provide evidence for your financial hardship and to provide evidence for your assets that, when liquidated, could repay debt that you are unable to repay with cash.

What is the Purpose of Bankruptcy Law?

Bankruptcy law aims to give individuals, companies, and municipalities the opportunity to restructure their debt so that they can repay as much of it as possible. There are plenty of situations where individuals encounter circumstances or hard times that may or may not be within their control and that make it impossible to repay the entirety of their debt. Rather than struggling to repay current debt while facing garnished wages and lawsuits, bankruptcy gives individuals or businesses an opportunity to press pause on these types of actions, get their bearings, and find a way to restructure or repay their debt as necessary.

Types of Bankruptcies in Michigan

There are many different types of bankruptcies that apply to different situations. Generally speaking, there are subchapters under the 2 main chapters of bankruptcy law used most often (Chapter 7 and Chapter 13) that individuals or businesses can use depending on their situations. The complexity of the sub chapters and the chapters can be easier understood with the help of an attorney.

Chapter 7: Liquidation

Chapter 7 bankruptcy is the type of bankruptcy most often used by individuals. Anyone who resides in a home they own can file for Chapter 7 bankruptcy. This is the chapter used to liquidate your assets, typically starting with the home, after which all of your debts are paid. When you file for Chapter 7 bankruptcy, you are given a completely fresh start with respect to your current debts, however it remains on your record for ten years. 

The process of Chapter 7 bankruptcy removes any unsecured debt, including debt such as medical bills or credit cards. The filing process generally costs around three hundred dollars and can take between four and six months. Before you can file for Chapter 7 bankruptcy, you must first adhere to proper credit counseling through an approved credit counselor within the United States Trustee and complete a course on debtor education. To repay your current debts, most of your assets will be sold by the interim trustee, however you will be able to retain some assets. The trustee selling your assets will be appointed by the United States Trustee. 

Chapter 13: Repayment Plan

The other option for bankruptcy, equally as common in individuals as liquidation, is Chapter 13. Chapter 13 Bankruptcy is a process to assist you pay back creditors and obtain a clean financy start. You will find three codes under which you can apply for Chapter 13 Bankruptcy, each of which refer to another way of correcting your financial troubles. The first code liquidates your assets to be able to repay creditors. The second code produces a payment plan, and the third code enables you to repay your debts with your regular earnings over a period of 3 to 5 years. 

Federal courts have sole jurisdiction over cases of Chapter 13 Bankruptcy. To pursue this process, you must complete a petition in which you list the contact details for each of  your creditors with the amounts owed. In the petition, you must also list your earnings, liabilities, and assets. Following a Chapter 13 Bankruptcy filing, creditors cannot sue you, garnish your wages, or make demanding telephone calls. Since each one of the different sections for filing differs, your circumstances are going to be unique. 

Chapter 11: Large Reorganization

This chapter is meant for businesses that do not want to close down their operation but simply want to restructure so that they are better able to repay their debt. With a Chapter 11 Bankruptcy, a business is able to stay in operation while negotiating a plan for repayment to their creditors.

Chapter 12: Family Farmers

Chapter 12 Bankruptcies are filed by family farmers and fishermen when filing on behalf of their company. This chapter is very much the same as Chapter 13 and Chapter 7 except that it applies specifically to family farmers and fishermen who need to be able to keep their operation running during the process of the filing.

Chapter 15: Used in Foreign Cases

Foreigners who have secured or unsecured debt in the United States and file for bankruptcy in their home country can use Chapter 15 to simultaneously file for bankruptcy in the United States. This chapter specifically applies to people who are not American citizens but have debt they need to resolve in the United States.

Chapter 9: Municipalities

Chapter 9  is exactly the same as other chapters, but reserved specifically for municipalities. While states cannot use it, municipalities within these states can use it to resolve their debt. With this plan, municipalities are able to find a way to negotiate a settlement, similar to Chapter 12 and 13 for companies and individuals. 

How to File for Bankruptcy in Michigan?

It is up to you to determine which chapter for bankruptcy is best suited to your situation. Working with an attorney will help you to evaluate your case and make this decision. As an individual, it is most common for you to choose between Chapter 7 and Chapter 13, as there is a federal threshold for Chapter 7 qualification. If you do not pass the means test for Chapter 7, you will have to file for Chapter 13 Bankruptcy. 

1. The initial steps to filing for bankruptcy include filling out a petition which fits with the specific chapter you are filing under. While the paperwork and fee is different for each chapter, what you must include is typically the same. 
2. This petition can be completed by an individual, couple, business, or municipality.
3. The petition will include information from the creditors to whom money is owed as well as the amounts still owed, your wages, liabilities, and assets. 
4. The petition and the corresponding filing fee must be submitted to the bankruptcy courts. 
5. Bankruptcy law in Michigan is a federal matter, so there are only specific courts that handle bankruptcy cases. 
6. Once the petition is submitted to the court, creditors are not allowed to hassle you by filing lawsuits, calling you, tring to collect debt or by garnishing wages. 
7. The court will then assign a bankruptcy trustee who will be in charge of your case. The trustee takes responsibility for your assets and attempts to get as much money back to your creditors as possible. All objections from creditors or requests for exemptions from you must go through the trustee. 

Michigan bankruptcy exemptions

When you file for bankruptcy, whether on your own or with the help of an attorney, you can submit a request to the bankruptcy trustee for bankruptcy exemptions. While the trustee’s job is to make sure that you pay creditors as much as possible against your secured and unsecured debt, you will still need enough money to live on day to day, as well as a few protected assets.

Exemptions can be difficult to understand because, when referring to exemption, the language used talks about equity. Equity is the value you have in something, or what that item or property is worth. So, where assets are concerned, getting an exemption for an asset means that the value is legally protected so that the bankruptcy trustee cannot liquidate it in order to repay your debt. Typically personal property that is exempt in federal court as part of bankruptcy code includes:

1. Clothing, within reason. This includes clothing that you need to wear day to day, but not necessarily designer clothes.
2. Household goods and furniture, within reason.
3. A vehicle, typically with a maximum value amount.
4. Professional tools that you might need in order to continue working in your job.
5. Equity in your home as part of the homestead exemption.

The homestead exemption is different from the other categories of exemptions in that it only applies to situations where liquidating the home provides more money than what you must repay on your debt. In such a case, you will get to keep the difference. 

Do Michigan bankruptcy laws require an attorney?

Bankruptcy law in Michigan does not require you to work with an attorney, however, it can be a much easier process if you choose to do so. Attorneys know the ins and outs of bankruptcy law necessary to keep this a straightforward process. They are familiar with the petitions and legal paperwork involved, and can help if your creditors object to any part of the petition. Attorneys  can also submit paperwork to bankruptcy courts on your behalf so that you do not have to always travel to be present in court. 

Since each case is different, each level of debt is different, and each chapter of bankruptcy has subchapters, consulting with an attorney can help you avoid critical mistakes which would otherwise result in your case being dismissed. Firebaugh & Andrews can review your situation and determine which chapter and subsequently which subchapter is going to offer the best resolution based on your assets, liabilities, and income. Call today for your free evaluation 734-722-2999

BEFORE YOU FILE CHAPTER 7 OR CHAPTER 13

If and when you decide that filing for bankruptcy is the best option, here are some information to keep in mind before filing in the state of Michigan:

• DO – Continue making payments on vehicles you intend to keep. (Do this after you have filed for bankruptcy as well.)
• DON’T – Borrow or withdraw from your 401K, IRA, or ERISA qualified savings and retirement plans to pay bills. If you do, you may be liable for penalties and taxes that are not protected by the bankruptcy filing.
• DO – Give “friendly” creditors a security interest in non-exempt property. If you have to borrow money from a friend or relative you could give that creditor a security interest in the property which you own. This will possibly make it less likely that a trustee will take the property.
• DON’T – Borrow money on your home to pay unsecured bills, such as credit card, utility, or medical bills.
• DO – Reduce the amount withheld from your pay for taxes.
• DON’T – Pay $600 or more back to relatives or business associates from whom you have borrowed money.
• DON’T – Put property you own into someone else’s name to avoid it being taken by creditors or the trustee. This is considered fraud.

AFTER YOU HAVE FILED CHAPTER 7 OR 13

Once you have filed for either Chapter 7 or Chapter 13 bankruptcy, keep these tips in mind:

• DO – Continue making payments on vehicles that you intend to keep. (Do this before filing bankruptcy as well.)
• DON’T – Sell or transfer assets without contacting our office first to discuss the matter.
• DO – Call our office when you get your Notice of Meeting of Creditors.
• DON’T – Be concerned if a few Creditors still attempt to contact you or send you bills or collection letters after filing.

GET MORE HELP WITH BANKRUPTCY IN MICHIGAN

If you need additional help with bankruptcy in Michigan, Moran Law Firm can help you get back on track. Call Firebaugh & Andrews Contact us for a free no-obligation consultation. 734-722-2999

Bankruptcy courts that remain open may impose additional protocols for entering the courthouse. Courts also may change clerk office hours, service of process rules, and deadlines for filing. Modifications due to COVID-19 vary widely, so you should make sure to check for rules specific to the district and courthouse in which you are filing, as well as any judge who has been assigned to your case.

Changes to Bankruptcy Rules Under the CARES Act

The COVID-19 crisis has resulted in a few temporary changes to substantive bankruptcy rules under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act and its successor, the Consolidated Appropriations Act of 2021 (CAA). For example, a debtor with a pre-existing Chapter 13 repayment plan potentially can extend the length of their plan to seven years. Obtaining this modification requires notice and a hearing, at which the debtor must show a material financial hardship resulting from the COVID-19 outbreak. Furthermore, a small business debtor may be eligible for an additional 60 days to perform post-petition obligations arising out of the terms of a lease of commercial property if they can show a material financial hardship arising out of COVID-19. Debtors should consult with an attorney on all bankruptcy rules, including temporary rules under the CARES Act and the CAA.

Moreover, stimulus checks and other payments under federal law that are related to the coronavirus will not count as current monthly income for debtors seeking to file under Chapter 7, and these payments will not count as disposable income for debtors seeking to file under Chapter 13. Thus, receiving a stimulus check will not affect your eligibility to file under either Chapter 7 or Chapter 13.

The debt limit for businesses filing for bankruptcy under Subchapter V of Chapter 11 has been substantially increased.

Waiver of Original Signature Requirement

Typically, a bankruptcy attorney must get an original signature (also known as a “wet signature”) from their debtor client on the petition for bankruptcy. This is true even if the documents are filed online. During the COVID-19 outbreak, however, certain bankruptcy courts have decided to waive this requirement. Debtors and their attorneys now can review the bankruptcy paperwork virtually, rather than meeting at the attorney’s office to arrange for a physical signature. Among the first courts to adopt this measure were the District of Kansas, the Central District of Illinois, and the Southern District of Alabama.

Section 341 Meeting of Creditors

Debtors who file for bankruptcy under Chapter 7 or Chapter 13 typically need to attend a meeting of creditors under Section 341 of the Bankruptcy Code. Due to concerns surrounding the COVID-19 outbreak, the U.S. Trustee Program requires that these meetings be conducted by telephone or other forms of remote communication for all bankruptcy cases through the national emergency and for 60 days thereafter. Bankruptcy courts are continuing to modify their procedures for these meetings, and the use of technology may vary depending on the court. You should check the website for the court in which you are filing so that you know what to expect. Call us for a free consultation 734-722-2999

Although in some cases your employer will find out about your bankruptcy filing (especially with Chapter 13 bankruptcies), rest assured that in most situations your bankruptcy won’t affect your current employment. However, it may come into play if you are applying for a non-government job.

Will You Lose Your Job?

No employer — government or private — may fire you because you filed for bankruptcy. Nor may an employer discriminate against you in other terms and conditions of employment  — for example, by reducing your salary, demoting you, or taking away responsibilities — because of your bankruptcy.

However, if there are other valid reasons for taking these actions, the fact that you filed for bankruptcy won’t protect you. In other words, an employer who wants to take negative action against you can do so provided there are other valid reasons to explain the action — such as tardiness, dishonesty, or incompetence. But if you are fired shortly after your bankruptcy is brought to your employer’s attention, you may have a case against the employer for illegal discrimination because of your bankruptcy.

How Employers Find Out About Bankruptcy Filings

In practice, employers rarely find out about a Chapter 7 bankruptcy filing. However, if a creditor has sued you, obtained a judgment, and started garnishing your wages, your employer will get the news. The bankruptcy will stop the wage garnishment, and your employer will be notified about it. In such a situation, your employer (or at least the payroll department) already knew you were having financial problems and will probably welcome the bankruptcy as a way for you to take affirmative steps to put your problems behind you.

If you file for Chapter 13 bankruptcy, your employer is likely to learn of your bankruptcy case. If you have a regular job with regular income, the bankruptcy judge may order your Chapter 13 payments to be automatically deducted from your wages and sent to the bankruptcy court. (This is called an “income deduction order.”) In effect, your employer will be pressed into service as a sort of collection agency, to make sure you honor your Chapter 13 plan.

Security Clearances

Many jobs require a security clearance. If you are a member of the armed forces or an employee of the CIA, FBI, another government agency, or a private company that contracts with the government, you may have a security clearance. Do you risk losing your security clearance if you file for bankruptcy? Probably not — in fact, the opposite may be true. According to credit counselors for the military and the CIA, a person with financial problems — particularly someone with a lot of debt — is at high risk for being blackmailed. By filing for bankruptcy and getting rid of the debts, you substantially lower that risk. Bankruptcy usually works more in your favor than to your detriment.

Effect of Bankruptcy on Job Applicants

No federal, state, or local government agency may take your bankruptcy into consideration when deciding whether to hire you. There is no corresponding rule for private employers, however, and some people find that having a bankruptcy in their past comes back to haunt them, particularly when applying for jobs that require them to deal with money (book­keeping, accounting, payroll, and so on).

Many private employers conduct a credit check on job applicants as a matter of course and will find out about your bankruptcy from the credit report. While employers need your permission to run a credit check, employers can also refuse to hire you if you don’t consent. If you’re asked to give this authorization, consider speaking candidly about what the employer will find in your file. Being honest up front about problems that are truly behind you may outweigh any negative effects of the bankruptcy filing itself