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Archive for October, 2012

Bankruptcy Median Income for Michigan Changing

Posted by Peter Behrmann, Esq. On October 30th

Bankruptcy Median Income for Michigan Changing November 1, 2012

 

Come November 1, 2012, the Median Income for Michigan used for bankruptcy eligibility will be changing once again.  The Median Income last changed May 1, 2012. 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

Current Median

$45,056

$51,660

$60,313

$72,454

After November 1st

$44,116

$51,554

$60,464

$72,366

*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 less people will now be eligible to file Chapter 7 bankruptcy then prior to November 1, 2012. For people looking to do a Chapter 13 Bankruptcy, less people will be eligible for a shorter 36 month, over the longer 60 month commitment period.  The largest change is the Median Income for a single individual which is dropping to $44,116, almost a $1,000 decline.  What this means is that single individuals in Michigan are simply making less money than they were six months ago.

 

 

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.

Dont Do This Before Filing Bankruptcy

Posted by Peter Behrmann, Esq. On October 20th

People always ask what not to do before filing Chapter 7 or Chapter 13 bankruptcy.  Below are a few “Don’ts” before filing bankruptcy.  By no means is this an inclusive list, but this should get you started:

1. Don’t leave out Bank, Checking, Savings, Brokerage, Credit Union accounts.

2. Don’t file if your income is greater than your expenses.

3. Don’t use your credit cards.

4. Don’t take Credit Card Cash Advances.

5. Don’t use convenience checks.

6. Don’t do balance transfers.

7. Don’t pay money to Family.

8. Don’t pay money to Friends.

9. Don’t tell a creditor that you intend to pay.

10. Don’t leave assets off of your paperwork.

11. Don’t file if you are about to receive a tax return or inheritance. Discuss the timing with your attorney.

12. Don’t fail to tell your attorney about your small business, sole proprietorship, partnership, LLC, LLP, LC, corporation, or hobby.

13. Don’t purchase a home shortly before filing bankruptcy without consulting your attorney.

14. Don’t give or gift property to anyone.

15. Don’t pay more than $600 on any past due bill.

16. Don’t transfer property to anyone.

17. Don’t cash out retirement plans or 401k’s.

18. Don’t take out a second mortgage.

19. Don’t gamble.

20. Don’t hide assets or debts.

21. Don’t take out “payday loans”.

22. Don’t put your money in your kids’ bank accounts.

23. Don’t omit or ‘save’ a credit card for after your bankruptcy.

24. Don’t fail to list debt to family or other “insiders.”

25. Don’t write bad checks.

26. Don’t borrow money.

27. Don’t forget to tell your attorney about liens you may have on your home or unpaid judgments so they can be avoided.

28. Don’t make major financial decisions without talking to your attorney.

29. Don’t get married before filing if your spouse has a high income.

30. Don’t misrepresent facts to your attorney.

31. Don’t run up your credit cards in advance of filing bankruptcy.

32. Don’t fail to appear at State court hearings, trial or proceedings; coordinate with your attorney.

33. Don’t hide from your attorney. Keep them up-to date with your address, phone number and email address.

34. Don’t bank where you owe money.

 

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.

Detroit Bankruptcy Judge Rules Bankruptcy Law Firm’s Retainer Agreement is Invalid!

When I first started practicing bankruptcy law I sat down and read the Bankruptcy Code. One of the first things I realized is that in a Chapter 7 bankruptcy all attorneys’ fees must be paid prior to the actual filing of the bankruptcy. That being said I have always structured my attorney’s fees to be as affordable as possible and always work with my clients on an affordable payment plan.

A Detroit bankruptcy law firm took a different approach. You can just pay them $100.00 and they will file your case. You can pay all the remaining fees to them after your case is filed. Their approach flew in direct violation of the Bankruptcy Code, and Chief Bankruptcy Judge Phillip J. Shefferly issued a ruling that their fee agreement is invalid. Further, Judge Shefferly ruled that they are unable to collect any of their attorneys fees post filing. Congratulations to the clients of this bankruptcy law firm you no longer have to pay your attorney!

You see the Bankruptcy Code is quite clear. All of your creditors (including your bankruptcy attorney) are stayed by the filing of your Chapter 7 bankruptcy petition. This means your attorney is forever barred from taking any steps to collect any debt from you under § 362(a). Any act to collect this prepetition debt — even just asking you to pay it — violates the automatic stay that went into effect when you filed for relief under Chapter 7. Once you receive your discharge, any act to collect the debt is now prohibited by the discharge injunction of § 524(a).

If only the attorneys at this bankruptcy law firm would have read and understood the Bankruptcy Code this never would have happened. Why do I bring this up? Well at Phoenix Law my wife and I work on every case together. We are not the largest law firm in Detroit, but we offer outstanding service. We are caring and compassionate with our clients that are going through a difficult financial time. We do everything in our power to represent our client’s best interest within the confines of the current law. If this sounds like the type of attorney you want, by all means give us a call.

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.