Grand Rapids Bankruptcy Attorney – Bankruptcy’s Effects On Credit

A common fear among individuals considering bankruptcy, is what the bankruptcy will do to their credit record and how long they will be affected.  It is true that under the Fair Credit Reporting Act, this notation on your credit report will last for ten years, but the effects it may have are not always clear cut.  In many cases, creditors view the bankruptcy as a step up from an individual’s prior credit conditions and some creditors may even view the bankruptcy as favorable, since, after discharge, the debtor will be free of other financial obligations and be more able to make payments on new lines of credit.

To better understand if filing for bankruptcy is the right action for you, it is recommended to set up a consultation with a local bankruptcy attorney.  

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Bankruptcy: Debt owed to the unemployment agency?

If you owed money to the Michigan Unemployment Agency, you might want to give my office a call.

First off, if a determination was made between Oct. 1, 2013, and Aug. 7, 2015 that you owe for back unemployment compensation, Michigan will no longer attempt to collect these alleged “over-payments,” unless the cases were individually reviewed by a human and affirmed with a new notice to the claimant. So if that is you, take a deep breath.

For all others, you can file either a Ch 7 or Ch 13 bankruptcy and one of two things will happen: (1) Michigan does nothing, and the full amount is forgiven under the Bankruptcy Code, (2) Michigan files a Complaint, and then we enter into a settlement.

But how much would the settlement be for? As you may already know, if Michigan is claiming an over-payment, they will demand that you repay them that amount, plus a x5 penalty. So if Michigan claims you were over-payed $5,000, they will also demand you pay them a $25,000 penalty, for a grand total of $30,000. If we enter into a settlement, by default Michigan will accept the original over-payment amount, plus a x1 penalty. As a result, you would owe $10,000 instead of $30,000.  And we can negotiate a manageable repayment amount, based on your circumstances.

More questions, contact me today.

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Bankruptcy: My mother has is mentally incapacitated, can she still file for bankruptcy? Yes.

It is possible for there to be a situation where a parent needs to file for bankruptcy, but has severe dementia, and therefore mentally incapacitated.

Dementia can come on gradually, limiting their ability to make wise financial decisions.  By the time you realize their mental health is affecting their finances, it could be too late. So how do they voluntarily file for bankruptcy?

The first step would be to have someone appointed to represent them. The most common approach is going through Probate Court and having a family member appointed Guardian and Conservator.  Although there is much debate whether having a valid Power of Attorney would be sufficient, having one appointed by the courts is as close to iron-clad as one can get.

Then, the individual appointed would work closely with their bankruptcy attorney to draft the requisite paperwork, and would then sign on behalf of the incapacitated individual. Additionally, you will want to attach the Guardianship and Conservatorship paperwork attached to the petition.

Additionally, you can motion to the Court for a waiver for the Credit Counseling Course. You will want to file this concurrently with your Petition to avoid having a MTD filed by the U.S. Trustee’s Office.

If you or a family member are considering filing for a Chapter 7 or Chapter 13 Bankruptcy, you will want an experienced attorney that has already faced virtually any situation that you can throw at them. Give me a call today at (616) 920-0555.

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Mobile Home in Bankruptcy? What are the benefits? A LOT!

If you currently have a loan for a mobile home, there is a chance you are paying a high interest rate for for a loan where you owe significantly more than what the home is worth. If that is the case, then I want to meet with you.

Section 506 of the bankruptcy code allows an individual in a Chapter 13 Bankruptcy restructure personal property loans in situations where they had the loan for more than 910-days by dropping the loan amount down to the Fair Market Value of it. Further, regardless of how old the loan is, you can drop the interest rate down to 4.5%. Let’s look at a few scenarios.

So let’s say you have a trailer that you purchased 10 years ago for $50,000, at 20% interest, with a 30 year loan. Your payment would be $836 a month, for the next 20 years. But let’s assume that due to depreciation, that trailer is only worth $15,000 in it’s current condition. I could restructure that loan for you, for $280 a month, and have it paid off in 5 years.

Please give me a call today if you have a mobile home. I would like to sit down and see how much I can drop your payment for you.

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How Often Can I File For Bankruptcy?

The answer really depends on which Chapter of Bankruptcy you previously filed (Chapter 7 and Chapter 13), and which Chapter you wish to file. Additionally, these restrictions only apply if you received a discharge in your previous filing. 

Ch 13 -> Ch 13: You must wait at least 2 years after the filing of your initial case before you may refill and receive another discharge. Fortunately, more than likely you were in the first case for at least the 3 year minimum, so theoretically you could refile the day after you receive your discharge.

Ch 7 -> Ch 13: You must wait at least 4 years after the filing of your initial case before you may refill and receive another discharge. 

Ch 13 -> Ch 7: You must wait at least 6 years after the filing of your initial case before you may refill and receive another discharge. There is an exception to this 6 year waiting period in instances where your initial Ch 13 was a 100% plan or where it was at least a 70% plan and proposed in good faith and your best efforts.

Ch 7 -> Ch 7: You must wait at least 8 years after the filing of your initial case before you may refill and receive another discharge.

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Bankruptcy: Can I Keep My Home?

Some people think that if you file for bankruptcy that you will lose your home. This is not the case in 99.9% of filings.

If you have less than $11,850 in equity in your home, you can keep your home, and your other assets will not be affected at all. If you have between $11,850 – $23,700 then you can keep your home, but your D5 Wildcard exemptions may be limited.

If you have between $23,700 – $37,775 in equity, then you will want to use your Michigan Exemptions. If you have more than $37,775 then you will want to contact my office. There are still a few more exceptions that you can take advantage of. Give me a call at (616) 920-0555 or email me at Travis@RussellGR.com

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Wildcard Exemption

As discussed in a prior article, think of an exemption as a credit you can use to buy back your property. If you have a loan or lien on a piece of property, then you only need to use your credits to buy back you ‘equity’ in the property (Equity = Value – Loan Amount). Most exemptions can only be used to protect a certain category of property. A “Wildcard” exemption, however, can protect ANY asset. So the question becomes, how much does one receive of Wildcard exemption?

At a minimum, you will receive $1,250.00 in Wildcard.  Additionally, you will receive whatever federal homestead exemption you have left over, capped at $11,850.00. This means, if you have a home with little to no equity in it, you can potentially receive $13,100.00 in D5 Wildcard exemptions to apply towards protecting your assets.

If you have any further questions on D5 Wildcard exemptions, or any other bankruptcy matter, please do not hesitate to contact me at (616) 920-0555 or Travis@RussellGR.com

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