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Michigan Bankruptcy Blog

Archive for June, 2012

“U” is for Unsecured Creditor in Bankruptcy

Posted by Peter Behrmann, Esq. On June 29th

“U” is for Unsecured Creditor in Bankruptcy

Unsecured creditors are the lowest creditors in priority in Bankruptcy.  Due to this low ranking in priority, often unsecured creditors will receive nothing, or a very small percent of the amount of money you owe them in Bankruptcy.  For example, secured debt (such as a house or car) and priority debt (such as IRS Tax Debt and Child support) have to be paid 100% before your unsecured creditors even begin to receive a dividend in a Chapter 13 Bankruptcy

 

Examples of Unsecured Debt include but are not limited to:

  • Credit Card Bills
  • Medical Bills
  • Payday Loans
  • Student Loans
  • Mortgage Deficiencies
  • Personal Loans
  • Back Utilities Bills
  • Rent and Lease Deficiencies

The most important thing to remember about your Unsecured Creditors in Bankruptcy is you must list EVERY creditor you have in your Bankruptcy.  You cannot keep a creditor out of Bankruptcy just because you like them and want to keep paying them.  The best advice is to make me aware of every unsecured creditor you have and let me guide you through the Bankruptcy process. 

 

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: Ayeupmeduck

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“T” is for Trustee in Bankruptcy

Posted by Peter Behrmann, Esq. On June 19th

T” is for Trustee in Bankruptcy

When you file bankruptcy in Detroit you will have a Trustee appointed to review your case.  There are two different types of “Trustees” that may be in involved in your bankruptcy case, Chapter 7 trustee’s and Chapter 13 Trustee’s.

Chapter 7 Bankruptcy Trustee:

In a Chapter 7 Bankruptcy, the Trustee is appointed by Department of Justice to review your case for accuracy and to the extent possible take any property or assets you have that are not protected by your bankruptcy exemptions and liquidate them to cash for the benefit of your creditors.  Your Chapter 7 Trustee is only paid a small amount of money to review your case, but has the potential to make more money by discovering assets you did not disclose in your bankruptcy, or by liquidating assets that are not protected by your bankruptcy exemptions.  Because of the Chapter 7 Trustee’s responsibilities it is very important that you tell me about any and all assets you have when you are filing Chapter 7 Bankruptcy.

Chapter 13 Bankruptcy Trustee:

In a Chapter 13 Bankruptcy, the Trustee is appointed by the Department of Justice to collect your Chapter 13 Payments during your case and to make payments to your creditors on your behalf.  The Chapter 13 Trustee’s obligation is to your creditors, not to you, so their desire it to have you pay as much possible in to you Chapter 13 Bankruptcy.  Our desire is to have you pay an affordable payment to the Chapter 13 Trustee that offers a fair distribution to your creditors, but allows you ample amount of income to live on and not go further into debt while you are in bankruptcy.    Because of the Chapter 13 Trustee’s responsibilities it is very important that you tell me about all of your sources of income and all of your living expenses for me to create an affordable Chapter 13 repayment plan when you are filing Chapter 13 Bankruptcy. 

 As you can see above a Chapter 7 Trustee is more interested in your assets, where as a Chapter 13 Trustee is more interested in your income and expenses.  Regardless of what bankruptcy you are filing with me, my advice is always to provide me with all of your income, assets, liabilities, and expenses, and let me guide you through whatever form of bankruptcy that is going to give you the greatest possible benefit for your financial situation. 

 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: LeoReynolds

 

Other Bankruptcy Attorneys articles on the Letter “T” 

“S” is for Signs You Should Consider Filing for Bankruptcy

Posted by Peter Behrmann, Esq. On June 15th

“S” is for Signs You Should Consider Filing for Bankruptcy

 Filing for Bankruptcy can be a hard and emotional decision for most people. You did the best you could and never intended to incur debt like you have. After living with the debt load for so long, most people become numb to the amount. It takes a toll not only on your finances but your emotional health and personal relationships can suffer as well. You should consider speaking with a Livonia bankruptcy lawyer, if any of the following signs describe your situation.

  1. You are considering borrowing money from your 401(k) or cashing in your IRA to pay bills or credit cards.
  2. You are not paying for necessary prescriptions or medical needs in order to make your minimum credit card payments.
  3. Your reasonable and necessary monthly expenses are greater than your monthly income.
  4. You constantly worry your paycheck is going to be garnished.
  5. You go to sleep and wake up wondering how you are going to get ahead.
  6. You are behind on your mortgage payments and your home is worth saving to you.
  7. You are behind on your mortgage payments and your home is worth far less than what it is worth.
  8. You refuse to answer the phone because of the constant creditor calls.
  9. Your debts exceed the value of all your assets.  
  10. You have don’t have the ability to negotiate with your creditors.

          Most struggle longer than they should and by the time they realize the inevitable, they have lost the assets they could have used to start over after a bankruptcy. The purpose of a bankruptcy is to give the honest person a fresh start without the debt and the feeling of hopelessness that goes with it. The best time to file is when you are financially overwhelmed but still have some assets to protect.

 

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: ShellyS

 

Other Bankruptcy Attorneys Blogging on the letter “S”

 

“R” is for Real Estate in Bankruptcy

In the early to mid 2000’s real estate was a solid investment.  The property values were always increasing where you could always tap into your home equity and in some cases even the future equity in your home.  Then came 2008, with the financial mess of Wall Street followed by the single most decline in real-estate values in your life time.   Today, most real estate listed in bankruptcy is under water, meaning you owe more on the real estate then it is worth. 

The first rule on real estate in bankruptcy is you have to list it.  If you have any interest in any real estate, it needs to be listed in your bankruptcy.  This includes times shares, redemptive rights in properties that have been foreclosed on, and real estate that family members have added your name to for estate planning purposes. 

Next, I often file bankruptcies for people who are behind on their mortgage payments for their real estate.  In bankruptcy, you can limit your liability on your real estate debt, or you can use a bankruptcy to cure a deficiency on your mortgage payments on your real estate.  If you own an investment property, we can even use a bankruptcy to lower the amount you owe on the property to current fair market value.

Everyone situation is different; however, real estate can plan an important part of any bankruptcy filing.  At your free consultation, we will discuss all real estate that you own and what your options are in 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 “R”