Livonia Michigan Bankruptcy

“P” is for Personal Bankruptcy

Personal Bankruptcy is an option that many people have had to consider the past few years as the economy has been struggling.  Because of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 a lot of people initially thought that bankruptcy was no longer an option; however, personal bankruptcy is still available to help consumers like you!

If you’re looking to file Personal Bankruptcy you have several options:

 

Chapter 7 Bankruptcy – is a fresh start bankruptcy.  It is over fairly quickly; however, you have to make below the Median Income for your family size to file a Chapter 7 personal Bankruptcy.  In a Chapter 7 bankruptcy in Michigan, you are allowed to keep whatever property that can be exempted in your bankruptcy.  Any property you may have that cannot be protected by an exemption will be forfeited to your Chapter 7 Bankruptcy trustee in turn for your debts being forgiven.  As a practicable standpoint almost 95% of cases filed do not have any assets that are turned over to a Chapter 7 Trustee, and the exemptions available protect all of your assets. 

 

Chapter 13 Bankruptcy – is a repayment plan bankruptcy.  This bankruptcy can last between 3 and 5 years and is available to people who have a reliable source of income.  One of the many benefits of a Chapter 13 bankruptcy is that you can use the bankruptcy to get caught up on a mortgage or car payment you are behind on.  A Chapter 13 personal bankruptcy is also what you will file if your income is above the limits making Chapter 7 not an option for you. 

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

Photo Credit: arrow9studio

 

Other Bankruptcy Attorneys Blogging on the letter “P”

• Pay Advice – New York Bankruptcy Lawyer, Jay S. Fleischman
• Phone Call - Cleveland Bankruptcy Attorney, Bill Balena 
• Plan – Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell 
• Preference -  Maui Bankruptcy Attorney, BankruptcyHI.com 
• Preferences – Colorado Springs Bankruptcy Attorney Bob Doig 
• Pride – Southgate, Michigan Bankruptcy Lawyer, Christopher McAvoy 
• Property of the Estate – Wisconsin Bankruptcy Lawyer, Bret Nason 
• Property of the Estate - Philadelphia Suburban Bankruptcy Lawyer, Chris Carr 
• Privacy - Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein 
• Payment - Jacksonville Bankruptcy Attorney, J. Dinkins G. Grange 
• Preference – Marin County Bankruptcy Attorney, Catherine Eranthe 
• Planning - Los Angeles Bankruptcy Attorney, Mark J. Markus 
• Priority - Bay Area Bankruptcy Lawyer Cathy Moran 

“O” is for Objection to Confirmation in Chapter 13 Bankruptcy

In a Chapter 13 Bankruptcy, your Bankruptcy Trustee and Creditors each have the option to file “Objections to Confirmation.”  Probably 95% of the Chapter 13 bankruptcies have at least one or two objections to confirmation filed in their case.  In Detroit, the Chapter 13 Trustees put at the bottom of the objection that the Trustee prays this Honorable Court deny confirmation, and dismiss your bankruptcy.  This does not mean your case is denied or dismissed.  These are usually just minor issues that need to be addressed with your case in order for the Trustee to sign off their approval on the case.  

In Detroit, we have three separate Chapter 13 Trustees and five separate Bankruptcy Judges.  Each Chapter 13 bankruptcy Trustee and each judge have certain things they want done certain ways.  The job of your Chapter 13 bankruptcy attorney is to know what is allowed under the bankruptcy code, know the individual policies or each judge, and the individual polices of each Trustee to get your case approved with the most favorable outcome for you. 

At my office, I always tell each of my clients that they will get objections, and that my job as your attorney is to resolve the objections on your behalf.  Make sure you have a Chapter 13 attorney willing to do this for you!

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

 

Photo Credit: TooFarNorth

 

Other Bankruptcy Attorneys Blogging on the letter “O”

• Objection – Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell 
• Objection to Discharge – Hilo Bankruptcy Attorney, Stuart T. Ing 
• Obligations – Colorado Springs Bankruptcy Attorney Bob Doig 
• Old - Cleveland Bankruptcy Attorney Bill Balena 
• Omitted – Bay Area Bankruptcy Lawyer Cathy Moran 
• Omitted creditor – St. Clair Shores MI bankruptcy attorney Kurt OKeefe 
• OOPS - Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein 
• Options to Bankruptcy - Suburban Philly Bankruptcy Lawyer, Chris Carr 
• Own - New York Bankruptcy Lawyer, Jay S. Fleischman 
• Objections by Creditor – Southgate, Michigan Bankruptcy Attorney, Chris McAvoy 
• Offer in Compromise – San Mateo Bankruptcy Attorney, Jeff Curl 
• Orders - Wisconsin Bankruptcy Lawyer, Bret Nason 
• Organize  - Marin County Bankrupttcy Lawyer, Cate Eranthe 
• Organization in Bankruptcy  - Los Angeles Bankruptcy Attorney, Mark J. Markus   

“N” is for Non-Attorney Bankruptcy

You do not need an Attorney to file Bankruptcy.  In fact, when you first meet with me I have to give you a disclosure that tells you can file your own bankruptcy, hire an attorney, or use a Bankruptcy Petition Preparer.

Written Notice Required by 11 U.S.C. Section 527(b)

IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER.

• If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney.  THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFIYING WHAT THE ATTORNEY OR BANKPRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST….

So you have three Choices, you need to decide what to do and how to get there.

Choice #1 – The Do it Yourself Bankruptcy

If you do not want to hire anyone you can download all of the court forms from the internet and fill them all out correctly and file your case on your own with the Bankruptcy Court.  The Biggest issue with filing your own bankruptcy is you have no idea what you are doing, or what you may lose.  People who file on their own almost always fill their forms out incorrectly.  The Bankruptcy Trustee can then take your property or belongings, or worse ask the bankruptcy court to deny you a discharge in Bankruptcy if you do not fill the forms out correctly.  I have seen people lose thousands of dollars in assets, just because they did not hire a proper attorney to prepare their bankruptcy petition. 

Choice # 2 – Use a Bankruptcy Petition Preparer

In Metro Detroit, a Bankruptcy Petition Preparer can only charge you up to $100.00 for their service.  The State Bar of Michigan prevents the Bankruptcy Petition Preparer for giving you any legal advice.  Basically, all the Bankruptcy Petition Preparer can do is, give you the forms to fill out, and tell you where the bankruptcy court is to file them for $100.00.  The bad news is a lot of Bankruptcy Petition Preparers charge you much more than $100.00, sometimes more than a Bankruptcy Attorney, but then force you to lie that you never paid them and never met them on your bankruptcy petition and at the bankruptcy court.  The issue is then now you have committed perjury on your bankruptcy petition for not disclosing what you paid your Bankruptcy Petition preparer.  When you get to court the Trustee will ask you again if you have paid anyone to help you with your Petition, again you lie and say no.  Then when the Trustee starts asking you how your filed out the petition, you can’t answer the questions correctly because you did not fill out the petition, so the trustee files a Motion to Dismiss your case and prevent you for getting a discharge for lying on your Bankruptcy Petition, and lying to the court.   

Choice # 3 – Hire a Competent Bankruptcy Attorney

This is by far the best choice when looking to file bankruptcy.  You can read my prior blog entry on how to find the best attorney to file your bankruptcy here.  There have been countless people who lose their assets and never received their bankruptcy discharge because they attempted to use a non-attorney petition preparer or filed on their own.   Now more than ever it is important to use an attorney that practices exclusively in the field of bankruptcy. Because of the bankruptcy law changes that took effect in 2005, bankruptcy is no longer an area of law that an attorney should just do a little bit of work in.  You as a client deserve an attorney that practices in the field of bankruptcy exclusively. 

 

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

 

Photo Credit: TooFarNorth

 

Other Bankruptcy Attorneys Blogging on the letter “N”

• Northern California Bankruptcy Court - Marin County Bankrupttcy Lawyer, Cate Eranthe           
• NACBA – Wisconsin Bankruptcy Lawyer, Bret Nason        
• Naked - New York Bankruptcy Lawyer, Jay S. Fleischman 
• Negative Notice – Jacksonville Bankruptcy Attorney J. Dinkins G. Grange
• Never - Cleveland Bankruptcy Attorney William Balena     
• No Asset - Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein           
• No Asset Report – Honolulu Bankruptcy Lawyer, Stuart T. Ing      
• Non-exempt Property – Miami Bankruptcy Attorney, Dorota Trzeciecka            /
• Nondischargeable – Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein
• Nondischargeable – Northern California Bankruptcy Lawyer, Cathy Moran           
• Nondischargeable Debt – Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell           
• Notice – Colorado Springs Bankruptcy Attorney Bob Doig 
• Notice - San Francisco Bankruptcy Attorney, Jeff Curl       
• Notice - Taylor, Michigan Bankruptcy Attorney, Chris McAvoy 
• Notice of Rights to Claim Exemptions – Charlotte Bankruptcy Attorneys, Collum & Perry           
• Numbers and New Bankruptcy Laws – Los Angeles Bankruptcy Attorney, Mark J. Markus                       

“M” is for Median Income

 

Come May 1, 2012, the Median Income for Michigan used for bankruptcy eligibility will be changing once again.  The Median income figures are used in figuring out the first part of the “Means Test” that is required when figuring out if you are eligible for Chapter 7 Bankruptcy, or for figuring out in Chapter 13 Bankruptcy if you will be required to commit to a 36, or a 60 month repayment plan.

 

Michigan Median Income Figures:

 

Family Size

	1 Person	2 People	3 People	4 People
After May 1, 2012	$45,056	$51,660	$60,313	$72,454
Current Median	$42,562	$50,738	$60,161	$71,758

*Plus 7,500 for each person over 4

 

Chapter 7 – Median Income

 

In a Chapter 7 Bankruptcy, the Median Income figure is used to see if you pass the first part of the Means Test.  For example, a single guy making $60,000 per year would not pass the Median Income portion of the Means Test and would most likely have to file a Chapter 13 Bankruptcy.  Whereas, a family of four people making $60,000 per year would most likely pass the Means Test and be eligible for a Chapter 7 Bankruptcy.

 

Chapter 13 – Median Income

 

In a Chapter 13 Bankruptcy, the Median Income figure is used to determine your commitment period to the bankruptcy.  For example, a single guy making $60,000 per year would have a commitment period of 60 months if he was to file a Chapter 13 Bankruptcy.  Whereas, a family of four people making $60,000 per year would have a commitment period of 36 months if they were to file a Chapter 13 Bankruptcy.

 

Impact of the New Median Income Figures

 

The impact of the new Median Income figures is that more people will now be eligible to file Chapter 7 bankruptcy then prior to May 1, 2012.  For people looking to do a Chapter 13 Bankruptcy, more people will be eligible for a shorter 36 month, over the longer 60 month commitment period. 

 

 

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

Photo Credit: ChrisinPlymouth

 

 

Other Bankruptcy Attorneys Blogging on the letter “M”

• Means Test – Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
• Means Test – New York Bankruptcy Lawyer, Jay S. Fleischman
• Meeting of Creditors - Colorado Springs bankruptcy Attorney Bob Doig
• Modify - Northern California Bankruptcy Lawyer, Cathy Moran
• Monthly Income – Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein
• Mortgage Arrears – Hawaii Bankruptcy Lawyer, Stuart T. Ing
• Mistakes - Cleveland Bankruptcy Attorney, William (Bill) Balena
• Marriage - San Francisco Bankruptcy Lawyer, Jeff Curl
• Median Income: Above or Below, Does it matter? - Los Angeles Bankruptcy Attorney, Mark J. Markus
•  Members of the Household - Wisconsin Bankruptcy Lawyer, Bret Nason
• Mortgages and Bankruptcy - Taylor, Michigan Bankruptcy Attorney, Chris McAvoy
• Means Test – Marin County Bankruptcy Lawyer, Cate Eranthe       

      

 

 

 

“L” is for Limits of Bankruptcy

Bankruptcy is a very powerful tool that allows honest people a fresh start. A bankruptcy discharge eliminates a person’s legal obligation to pay a debt that is discharged. Most, but not all, types of debts are discharged if the debt existed on the date the bankruptcy case was filed.

Limits of Bankruptcy – Debts that are automatically not discharged in Bankruptcy!
Some of the most common types of debts which are not discharged in bankruptcy or may be held non-dischargeable are:

• Debts for most taxes;
• Debts incurred to pay non dischargeable taxes;
• Debts that are domestic support obligations;
• Debts for most student loans;
• Debts for most fines, penalties, forfeitures, or criminal restitution obligations;
• Debts for personal injuries or death caused by the debtor’s operation of a motor vehicle, vessel, or aircraft while intoxicated;
• Some debts which were not properly listed by the debtor;
• Debts that the bankruptcy court specifically has decided or will decide in this bankruptcy case are not discharged;
• Debts for which the debtor has given up the discharge protections by signing a reaffirmation agreement in compliance with the Bankruptcy Code requirements for reaffirmation of debts;
• Debts owed to certain pension, profit sharing, stock bonus, other retirement plans, or to the Thrift Savings Plan for federal employees for certain types of loans from these plans;
• Debts incurred on the basis of fraudulent acts;
• A debt from willful and malicious injury to another or another’s property, or an intentional tort (conversion, assault, battery, etc.);
• Debts from embezzlement, larceny or breach of trust; and
• Debts arising from a marital property settlement agreement or divorce decree.

If you have any of these debts it is very important that you disclose these debts with your Bankruptcy Attorney so he or she can fully advise you on how the bankruptcy will affect the status of these debts that are limited from Discharge in your Bankruptcy.

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy, and Foreclosure Prevention.
Photo Credit: Leo Reynolds
Other Bankruptcy Attorneys Blogging on the letter “L”:

• Lien – New York Bankruptcy Lawyer, Jay S. Fleischman
• Lien Stripping - Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
• Lie, the Big Mortgage Industry – St. Clair Shores MI bankruptcy Attorney Kurt O’Keefe
• Lift the Stay - Marin County Bankruptcy Attorney, Catherine Eranthe
• Luxuries – Colorado Springs Bankruptcy Attorney Bob Doig
• Long Term Payments, Chapter 13 Plans - Philadelphia Suburban Bankruptcy Lawyer, Chris Carr
• Liquidated – Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein
• Lien Stripping – Honolulu Bankruptcy Attorney Stuart T. Ing
• List It Or Lose It – Allen Park, Michigan Bankruptcy Lawyer, Christopher McAvoy
• Life Insurance – Cleveland Bankruptcy Lawyer, Bill Balena
• Life After Bankruptcy – San Francisco Bankruptcy Attorney, Jeena Cho
• Listing Assets and Debts in Bankruptcy – Los Angeles Bankruptcy Attorney, Mark J. Markus
• Lawyer – Wisconsin Bankruptcy Lawyer, Bret Nason

“K” Knowing What Bankruptcy Attorney to Hire!

OK, you have now decided that you need to file for bankruptcy. Now, how do you find the proper attorney for you? You need to KNOW what to look for in finding a well-qualified bankruptcy attorney. Here are several tips in helping you find the best attorney for you:

 

Cheapest is not always best.

I see signs on the side of the road “Bankruptcy $500!” Let me be upfront, I do not do bankruptcy for $500.00, if this is what you are looking for than I wish you the best of luck. Keep in mind like anything; you get what you pay for.

 

Don’t hire a “Jack of All Trades Attorney”

Take a look at the attorney’s website, do they practice bankruptcy exclusively? Do you really want someone who does Criminal, Family, Personal Injury, and Immigration doing your bankruptcy? The answer is simply NO. Bankruptcy is a very specialized area of law and you want an attorney that practices exclusively in the field of Chapter 7 and Chapter 13 Bankruptcy.

 

Don’t hire an attorney that just files Chapter 7’s or Chapter 13’s

A lot of attorneys just file Chapter 7 bankruptcies. Why? Chapter 7’s are easier and maybe they do not know how to do Chapter 13’s. Some attorneys just do Chapter 13’s, why? You can make more money on Chapter 13’s. If you happen to meet with one of these attorneys you will either be sold a Chapter 7 or a Chapter 13 based on what that attorney exclusively does. You want an attorney that files both Chapter 7 and Chapter 13 bankruptcy, when you meet with me at your free consultation we will review the pro’s and con’s of both Chapter 7 and Chapter 13 together. Then you will be able to make an informed decision with my advice on what is the proper bankruptcy for you in your particular situation.

 

Don’t hire a Bankruptcy Mill

Metro Detroit has a few bankruptcy firms with dozens of attorneys. They advertise as being the biggest and best bankruptcy law firms in Metro Detroit. The issue with these large firms is you lose the personalized service, and you are just a number to them. At these firms, you will meet with one attorney during your initial consultation and someone else (maybe a paralegal) will prepare your case. At court, you will find another attorney, someone you have never met before, there to represent you. At our firm, you will work with me and my wife exclusively, we both work on every case together (two sets of eyes are better than one) and we represent you at court.

 

Personalized, Professional Service is Needed!

Bankruptcy can be a very stressful process. In a Chapter 13 bankruptcy, you may be working with that law firm and staff of 3 to 5 years. You want to make sure the firm you hire is friendly to work with, how do they answer the phone? Do they keep their appointments with you on time? Does the attorney rush you through the initial consultation and not take the time to truly understand your situation? Do the attorneys and staff talk to you with respect, and not talk down to you? At my office, we pride ourselves in providing personalized service to our clients, after all, our clients are the reason we are here and they deserve respect and an attorney to take time to explain things to them.

 

Initial Disclosures required under the Bankruptcy Code

A great test to see if you should trust the attorney you are meeting with is do they immediately provide you with a set of Initial Disclosures that are required to be provided to any potential client under the Bankruptcy Code? I cannot count the number of clients that I have had consultations with, where I am the second or third attorney they are consulting with, but I am the first to provide them with the Initial Disclosures required under the Bankruptcy Code. If the attorney you are having a consultation with does not provide you with the Initial Disclosures, DO NOT HIRE THEM, they obviously have not read the bankruptcy code and you do not want them filing your bankruptcy.

 

Peter Behrmann is a Livonia Bankruptcy Attorney. From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy, and Foreclosure Prevention.

Photo Credit: TooFarNorth

 

 

Other Bankruptcy Attorneys Blogging on the letter “K”:

• 401k – Marin County Bankruptcy Attorney, Catherine Eranthe
• Keep – Northern California Bankruptcy Lawyer, Cathy Moran
• Keep your retirement accounts – Taylor, Michigan Bankruptcy Attorney, Christopher McAvoy
• Keeping Secured Loans - Hawaii Bankruptcy Lawyer, Stuart T. Ing
• Keeping your business - Dorota Trzeciecka Bankruptcy Blog
• Keys - New York Bankruptcy Lawyer, Jay S. Fleischman
• Kids - Colorado Springs Bankruptcy Attorney Bob Doig
• Knowledge - Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
• Knowledge - Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein
• Know – Cleveland Area Bankruptcy Lawyer, Bill Balena
• Keep – San Francisco Bankruptcy Attorney, Jeena Cho
• Dangers of Borrowing Against 401K – Los Angeles Bankruptcy Attorney, Mark J. Markus
• Keeping Debt Collectors at Bay - Wisconsin Bankruptcy Lawyer, Bret Nason

“J” is for Joint Bankruptcy Filing

 

When a married couple comes into my Livonia bankruptcy office to learn about bankruptcy, we complete a full analysis to determine what course of action is best for their particular situation.  Sometimes, we file just the husband, sometimes just the wife, and sometimes we take advantage of being able to file both as a joint bankruptcy.   

 

A joint bankruptcy is by no means required in Michigan.  Sometimes, one person has all of the debt, or one person may have to0 many assets to make a bankruptcy practicable in their situation.  In your Free Consultation, we will review your family situation to determine if it makes more sense to do a single bankruptcy, a joint bankruptcy, or maybe even no bankruptcy at all. 

 

A joint bankruptcy filing is only available to married couples in Michigan.  You are not eligible to file a Joint bankruptcy unless you are legally married.  One of the greatest benefits of being able to file a joint bankruptcy is cost.  At my office it costs the exact same to file a bankruptcy for one spouse, as it does to file a bankruptcy for a married couple.  I do not charge my clients anything more because they are a joint bankruptcy.  If you are interested in learning more about a joint bankruptcy, please give our office a call to schedule a free consultation. 

 

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy, and Foreclosure Prevention.

Photo Credit: MrMark

 

Other Bankruptcy Attorneys Blogging on the letter “J”: 

• Joint Bankruptcy Filing  – Southgate, Michigan Bankrutpcy Lawyer, Christopher McAvoy               
• Joint Debts - Hawaii Bankruptcy Attorney, Stuart T. Ing            
• Joint Filing - Marin County Bankruptcy Attorney, Catherine Eranthe
• Judgment – Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
• Judgment Debtor  - San Francisco Bankruptcy Attorney, Jeena Cho 
• Judgment Liens  - Colorado Springs Bankruptcy Attorney Bob Doig 
• Judgment Liens  - Philadelphia Suburban Bankruptcy Lawyer, Chris Carr               
• Judicial Lien - Cleveland Area Bankruptcy Lawyer, Bill Balena  
• Jurisdiction  - Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein               
• Justice in Bankruptcy – Los Angeles Bankruptcy Attorney, Mark J. Markus          
• Justify - Northern California Bankruptcy Lawyer, Cathy Moran    
• Your Personal Finance Lawyer – New York Bankruptcy Lawyer, Jay S. Fleischman               
• Jail  - Wisconsin Bankruptcy Lawyer, Bret Nason            

“I” Is for Internal Revenue Service (IRS) Tax Debt in Bankruptcy

Debt owed to the Internal Revenue Service and the State of Michigan can be discharged in bankruptcy in certain situations!

One of the most common misconceptions about personal income tax debt owed to the IRS is that is cannot be discharged in bankruptcy. 

 However, IRS tax debt can be discharged in a chapter 7 or a chapter 13 Bankruptcy if the following five part rule is met:

1. The due date for filing a tax return is at least three years before you filed bankruptcy.  This means that as of April 16^th of this year any taxes owed from 2008 backwards could be completely discharged in bankruptcy.
2. The tax return was filed at least two years prior to you filing bankruptcy.  This means if you were filing bankruptcy on April 16^th of this year to discharge 2008 taxes, you would have had to file your 2008 taxes before April 15^th of 2010.
3. The tax assessment is at least 240 days old.   Under normal situations, this is not an issue, because most taxes are assessed when filed, or soon thereafter.  This would be an issue if you were recently audited and just received an assessment, or have been attempting to do an offer in compromise with the IRS then you might have to wait the required 240 days before you could discharge your tax debt in bankruptcy.
4. The tax return is not fraudulent.  Just like in bankruptcy normally, debts created by fraud are not dischargeable in bankruptcy. 
5. The taxpayer is not guilty of tax evasion.  Basically, you cannot be intentionally trying to avoid your tax liability, and then file bankruptcy. 

Keep in mind that these rules only apply to personal income tax debt.  These rules do not apply to trust fund tax debt (Sales tax, payroll taxes, etc) as these are not dischargeable in bankruptcy.  Further, if the IRS has filed a tax lien on your property the filing of your bankruptcy will not remove the tax lien, it will just remove your personal liability on the debt owed to the IRS, meaning you will still have to pay off the tax lien in order to sell your property in the future. 

In certain situations where you are not eligible to discharge tax debt in Chapter 7 Bankruptcy, a Chapter 13 repayment plan may better treat your situation.  In a Chapter 13 bankruptcy, we can treat your recent tax debt to the IRS and the State of Michigan in a repayment plan where the tax debt is paid back at 0% interest over a three to five year period.  This is often a much better choice then directly paying the IRS, because they continue to incur interest and late fees that they are prohibited from doing when you file a Chapter 13 Bankruptcy.

 

Photo Credit:  Leo Reynolds

 

Peter Behrmann is a Michigan bankruptcy attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

 

Other Bankruptcy Attorneys Blogging on the Letter “I”

• In Forma Pauperis - Colorado Springs Bankruptcy Attorney Bob Doig 
• Income - New York Bankruptcy Lawyer, Jay S. Fleischman 
• Income - Marin County Bankruptcy Attorney, Catherine Eranthe 
• Income Tax Refunds – Downriver Bankruptcy Lawyer, Christopher McAvoy 
• Independent Contractor - Big Island Bankruptcy Attorney, Stuart T. Ing
• Insiders - Los Angeles Bankruptcy Attorney, Mark J. Markus 
• Insiders -  Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein 
• Insolvency – Wisconsin Bankruptcy Lawyer, Bret Nason 
• Instant - San Francisco Bankruptcy Attorney, Jeena Cho 
• Involuntary Bankruptcy -  Cleveland Area Bankruptcy Lawyer, Bill Balena 
• Involuntary Petition –  Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell 
• IRA’s, Pensions, etc., will you lose them in Bankruptcy? - Philadelphia Suburban Bankruptcy Lawyer, Chris Carr 
• IRS - Northern California Bankruptcy Lawyer, Cathy Moran 
• Insurance - Pittsburgh Bankruptcy Attorney, Shawn Wright    

“H” is for Household Median Income

 

Household median income is an important part of any bankruptcy analysis.  During your free consultation at my Livonia, Michigan Bankruptcy Law Office, I always figure out what your household income is to determine how your income relates to the Household median income for the state of Michigan.

 

The following are the current household median income figures for the state or Michigan.

 

Michigan	Household of 1$43,677	Household of 2$50,079	Household of 3$58,467	Household of 4$70,237

 

 *Add $7,500 for each individual in excess of 4.

 

Your household income is important in both a Chapter 7 and a Chapter 13 Bankruptcy

 

In a Chapter 7 Bankruptcy, your household income is the first test in figuring out if you are even eligible for Chapter 7 relief.  For example, a single guy making $65,000 per year is most likely not eligible for Chapter 7.  However, a married couple with three children making $65,000 per year should be eligible for Chapter 7 Bankruptcy relief.

 

In a Chapter 13 Bankruptcy, your household income is the first test in figuring out if you Chapter 13 payment plan will be 36 or 60 months.  For example, a single guy making $65,000 per year would be in a Chapter 13 Bankruptcy for 60 months.  However, a married couple with three children making $65,000 per year could complete a Chapter 13 in just 36 months.

 

Like anything in Bankruptcy the above are not bright line rules, there are exceptions and this is just one of the reasons you should consider using a law firm like ours that practices exclusively in the field of Chapter 7 and Chapter 13 Bankruptcy. 

 

Photo Credit  TooFarNorth

Peter Behrmann is a Michigan bankruptcy attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

 

Other Bankruptcy Attorneys Blogging on the Letter “H”

• Harassment by Creditors - Downriver, Michigan Bankruptcy Attorney, Christopher McAvoy 
• Hardship Discharge – Philadelphia Bankruptcy Lawyer, Kim Coleman 
• Hearing – Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell 
• Home is Where the Heart Is - San Francisco Bankruptcy Attorney, Jeena Cho 
• Homeowner’s Association Dues – Marin County Bankruptcy Attorney, Catherine Eranthe 
• Homestead - Colorado Springs Bankruptcy Lawyer Bob Doig 
• Honest but Unfortunate Debtor – Wisconsin Bankruptcy Lawyer, Bret Nason 
• Honesty - Cleveland Area Bankruptcy Lawyer, Bill Balena 
• Honesty (and Fraud Avoidance) - Philadelphia Suburban Bankruptcy Lawyer, Chris Carr 
• House - Northern California Bankruptcy Lawyer, Cathy Moran 
• House - Los Angeles Bankruptcy Attorney, Mark J. Markus 
• Household -  New York Bankruptcy Lawyer, Jay S. Fleischman 
• Household -  Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein 
• Household Size - Hilo Bankruptcy Attorney, Stuart T. Ing 
• How Much Is Your Home Worth? -  St. Clair Shores Michigan Bankruptcy Attorney Kurt OKeefe   

A Guaranty is a creditor that is often forgotten about when people file bankruptcy.  Regardless, the bankruptcy code is very clear that you have to list ALL of your creditors when you file bankruptcy.  One of the first things you will receive when you visit my Livonia Bankruptcy Office is a list of disclosures that I am required to supply you with under the bankruptcy code.  The Bankruptcy Code is very clear; you must list all of creditors, including Guarantees.

I think the number one reason people forget about their Guaranty debt, is because it is usually not the debt that’s currently forcing them to visit me.  Sometimes the debt they guaranteed is not even on their credit report, they may not receive monthly bills on the Guaranty and to them they do not really feel they owe the debt.  I hear it all the time, “That’s not my car loan, it is my sisters, I just co-signed for it.”  Nonetheless, it is very important that we discover these debts and list them in your bankruptcy for your protection.

 

Let’s look at the definition of Guaranty.  A Guaranty is a formal pledge to pay another person’s debt, or to perform another person’s obligation in the case of default.  Further, a Guaranty is serving as security for a pledge to pay a debt.

 

Some examples of Guaranty’s that need to be listed in your bankruptcy are:

• Serving as a co-signer on a car loan for a friend or family member
• Serving as a co-signer on any other debt for someone else
• Guaranty’s on debts for a business
• Guaranty’s of your family members student loans.

 

The next questions I here:  What is going to happen to my sister’s car if I file for bankruptcy?

Well if your sister purchased the car and you co-signed on the purchase, your bankruptcy is simply going to eliminate the potential Guaranty liability if your sister was to not make her car payment on time.  Your sister can still maintain and keep her car, so long as she continues to make the payments as they come due.   You’re simply no longer on the hook if she was ever to default on the obligation.

 

As you can see Guaranty debts are just as important as any other debts you have when your file bankruptcy.  The best advice I can give you it to make your bankruptcy attorney 100% aware of any and all debts you have, including co-signed and Guaranty obligations you have. 

 

I offer a one-hour in-depth consultation at no cost to explain the options you have to obtain a fresh start Call 734-779-9999 today!

 

Peter Behrmann is a Michigan Bankruptcy Lawyer.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

Photo Credit: TooFarNorth

 

Other Bankruptcy Attorneys Blogging on the Letter “G”:

• Garbage In, Garbage Out – Wisconsin Bankruptcy Lawyer, Bret Nason
• Garnishment – New York Bankruptcy Lawyer, Jay S.Fleischman
• Garnishment – Maui Bankruptcy Attorney, Stuart Ing     
• Garnishment – Philadelphia Suburban Bankruptcy Lawyer, Chris Carr MBA
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• Gee!!! – Philadelphia Bankruptcy Lawyer, Ray Kempinski              
• General Unsecured Creditor - Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell       
• Gifts – Los Angeles bankruptcy attorney, Mark J. Markus              
• Goals – Colorado Springs Bankruptcy Attorney Bob Doig
• Good Faith – Taylor, Michigan Bankruptcy Attorney, Christopher McAvoy             
• Good Faith – Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein 
• Good Manners - Cleveland Area Bankruptcy Lawyer, Bill Balena
• Good to me – San Francisco Bankruptcy Attorney, Jeena Cho     
• Guaranty – Northern California Bankruptcy Lawyer, Cathy Moran
• Guilt - Jacksonville Bankruptcy Attorney, Monica D. Shepard      
• Gumshoe – Marin County Bankruptcy Attorney, Catherine Eranthe         
• Guilt - Detroit Michigan Bankruptcy Attorney