The average person often may not know what bankruptcy is. Some history helps explain why bankruptcy laws exist — and why you shouldn't be hard on yourself if you choose to file.
Going all the way back to the days of the Old Testament, when a person's debts were supposed to be forgiven every 7 years, bankruptcy is a system set up to help people with overwhelming debt. If you have debt problems don’t be hard on yourself. It happens to a lot of people. Doctors, lawyers and even Presidents have used the bankruptcy laws to help themselves.
Today, bankruptcy is defined by federal laws that allow individuals to voluntarily get their debt legally forgiven or consolidated into an affordable monthly payment. Bankruptcy also allows them and their family to avoid and stop creditors who can use state laws to seize assets — and garnish wages and bank accounts — to forcibly collect debt. In essence, bankruptcy is a special system to help debtors deal with their debt problems in an ethical and fair manner.
The Automatic Stay is built in to bankruptcy law and provides a Debtor(s) (the individual or persons who file bankruptcy) with a federal court order that prohibits any and all Creditors (companies or persons trying to collect on a debt) from taking any actions to collect, as they are immediately ordered to stop any efforts to collect on a debt, including garnishment of wages or seizure of assets. The Automatic Stay even prohibits creditors from calling you or sending you letters.
In Chapter 7 bankruptcy, individuals or married couples that earn less than a specific amount of wages under a means testing formula can qualify once every 8 years to eliminate all legal obligations on most or all of their debts. If they have a home or auto loan that they wish to keep they usually can, as you are allowed to live your life and pay for reasonable and necessary living expenses and family obligations.
Chapter 7 bankruptcy is referred to as "Liquidation" (which refers to selling assets to pay debt) BUT in most instances, the average West Michigan individual or family can exempt and keep all or most of their personal property and assets. Prior to filing Chapter 7 your bankruptcy attorney can advise you if you are under your exemptions and can keep all of your assets. Chapter 7 can give individuals and families a much deserved "fresh start."
In Chapter 13 bankruptcy, individuals or married couples that have overwhelming debt but wages or income that does provide them with some disposable income can consolidate their debt into an affordable monthly payment. If regular payments are made toward this debt for the applicable commitment period (3 or 5 years), the debt will be discharged and eliminated at the end of the plan, giving the Debtors a “fresh start” at the end.
Debtor(s) can stop their homes from being foreclosed or stop automobiles from being repossessed and bring loan arrearages current over time through a 3 year or 5 year repayment plan depending on their income level and other factors. If Chapter 13 is right for you it will give you an affordable monthly payment that consolidates all of your debt. All of your debts may be paid through the plan and you get the peace of mind that creditors and debt collectors can't contact you directly and can't seize your assets or garnish your wages and bank accounts.
White Pigeon attorney Paul Gipson has practiced law in West Michigan for over 20 years. He handles bankruptcy for individuals and families in St. Joseph, Cass, Branch and Kalamazoo counties, with a convenient office location within one mile of Highway 131 and US 12 for local areas including Constantine, Sturgis, Three Rivers and Centreville.
Attorney Gipson doesn't just provide experienced legal services; he offers the convenience, affordability, and trust you need when facing legal issues. He informs every client about all their legal options, keeps his rates reasonable, and offers flexible appointment times including evenings and weekends.
If you are considering bankruptcy, contact Attorney Gipson to request a free phone consultation.
We are a debt relief agency. We assist clients file for bankruptcy relief under the bankruptcy code.