Frequently Asked Questions About Bankruptcy

At the law office of experienced Oakland County bankruptcy lawyer Ronald S. Siegel, we find that many of our clients have pressing questions about their legal rights and options about how to deal with and eliminate debt. We have included general responses to several of these questions below for your reference.

Is There More Than one Type of Bankruptcy?

Yes. Individuals and couples can qualify for either Chapter 7 or Chapter 13, depending upon the kind of debt that needs to be discharged and the debtor’s income. Additionally, Chapter 11 and Chapter 12 provide bankruptcy relief to larger businesses and people in certain occupations, such as farming.

Will Filing Stop Creditors from Calling?

Yes! The immediate effect of filing is that it automatically and instantaneously imposes an injunction on creditors, called the “automatic stay,” that prohibits them from taking any action against you in furtherance of trying to collect on a debt. Specifically, from the moment that your case is filed, creditors are not allowed to engage in any collection efforts. That means that they cannot call or write you to demand payment, they cannot sue you or continue lawsuits, they cannot garnish or levy your paycheck or bank account, and they cannot foreclose or continue foreclosure proceedings. Put another way, your creditors are frozen in their tracks the instant that you file.

Are all Debts Dischargeable in Bankruptcy?

No. There are several kinds of debt that are not dischargeable, including alimony, child support, some student loans, certain taxes, criminal fines, restitution, and judgments in some kinds of civil lawsuits. We will analyze the type and nature of your debts and develop pre bankruptcy filing strategies to determine whether and in what circumstances certain debts can be eliminated that might not otherwise be dischargeable.

Can I Keep My Car?

Usually you can, but whether or not to do so depends upon the circumstances. In both Chapter 7 and Chapter 13 bankruptcy, the debtor typically has the option of either reaffirming the debt owed to the finance company that extended the loan for their vehicle or surrendering the vehicle and eliminating the payments. Debts that are reaffirmed are not discharged in bankruptcy and must be paid in full according to the original terms of the loan. If your car is worth more than you owe on it, and if you can afford the payments once your other debts are discharged in bankruptcy, reaffirming may make sense. If you owe more than the car is worth, redeeming the vehicle (i.e. paying the lender the fair market value, usually in a lump sum) may be the best choice. In situations in which the debtor owes more than the automobile is worth and cannot afford to make a lump sum payment for the car’s fair market value, however, surrendering the car and discharging the loan in bankruptcy may be the best We will explore and discuss which option is best for you.

What About My Home?

Typically under either Chapter 7 or Chapter 13, a debtor may continue ownership of their home as long as they continue to make the required payments. If you are behind in your house payments and are being threatened with foreclosure, a Chapter 13 bankruptcy may be the best option to stop the foreclosure and to force the mortgage company to accept a plan for repaying the back payments over an extended period of time. All options, including whether you can afford to keep the home, are considered and discussed with you to determine the best course of action.

What Kind of Paperwork is Necessary to File for Bankruptcy?

Attorney Siegel will work with you to prepare all of the required court documents. To make sure that the paperwork is accurate, you will need to provide certain documentation of your debts, assets, current income, and tax returns. Please refer to the page “What to Bring to Initial Consultation” under the Resources tab for a list of the documents that you will need. Do not worry if you do not have all of them, as some of the documents can be obtained online.

How can I Talk to a Knowledgeable Bankruptcy Attorney?

To schedule a consultation with skillful Oakland County lawyer Ronald S. Siegel, call us at 248-646-4600 or contact us online. He represents people who need a consumer law attorney in Farmington Hills, Pontiac, Southfield, Waterford, Detroit, Livonia, Dearborn, Flint, Sterling Heights, and Roseville, as well as other areas in Oakland, Wayne, Macomb, Genesee, Livingston, and Washtenaw Counties.

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