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Archive for March, 2013

Giving to church and filing Chapter 13 Bankruptcy

Posted by Peter Behrmann, Esq. On March 31st

Giving to church and filing Chapter 13 BankruptcyChurch and Bankruptcy

 

Happy Easter!  On this religious day I figured I would post about religious giving in bankruptcy.  Specifically, about giving to your local church and filing Chapter 13 Bankruptcy in Detroit.  I can not count the number of people who have came into my office that their number one concern about filing bankruptcy is whether or not they are going to be able to continue to tithe each week.  In short answer, yes.

 

In a Chapter 13 bankruptcy, we have to make a budget of your average monthly income and average monthly expenses that are reasonable and necessary for you and your family.  In Detroit, the Chapter 13 Trustee’s and the Chapter 13 Judges have consistently let families continue to tithe at the rate they have been giving in the past.  We are able to budget this monthly tithing in your budget and it will in turn decrease the amount of your Chapter 13 payment is each month to your creditors.

 

Now this does not mean that you can suddenly decide to start giving, or suddenly decide to increase your giving level prior to filing bankruptcy.  The bankruptcy process of allowing you to contribute to your church is an option if have been giving in the past. 

 

I have budgeted up to 10 percent for a family that had the records to prove they have been giving 10 percent for their entire life.  We simply provided the bankruptcy trustee with a print out from my clients church showing her contributions over the past two years and the Trustee approved the expense.

 

In short, if you’re having issues making your normal living expenses a lot of people immediately stop giving to church.  However, sometimes the best answer is to meet with me and stop paying your credit cards so you can continue to contribute to your house of worship.

 

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.

Median Income for Michigan Changing April 1, 2013

Posted by Peter Behrmann, Esq. On March 28th

Median Income for Michigan Changing April 1, 2013Median Income in Livonia Bankruptcy

 

Come April 1, 2013, the Median Income for Michigan used for bankruptcy eligibility will be changing once again.  The Median Income last changed November 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

New Median Income

$45,029

$52,621

$61,715

$73,864

Current Median Income

$44,116

$51,554

$60,464

$72,366

*Plus 8,100 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 April 1, 2013. 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 biggest change is the Median Income for a family of three which is increasing to $61,725, a $1,251 increase.  What this means is that individuals in Michigan are making slightly more 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.

Repaying debts and not filing bankruptcy

Posted by Peter Behrmann, Esq. On March 15th

Repaying debts and not filing bankruptcyDebt Gone

Bankruptcy is not for everyone.  Yes, you heard me, I am a bankruptcy attorney and I am telling you that not everyone needs to file for bankruptcy.  Each week I meet with at least one person where I will flat out tell them that bankruptcy is not for them, or perhaps there are other options available to them.

So let’s say you’re not going to file bankruptcy?  How can you yourself repay you debts?  Here is my advice:

  • Mortgage, rent, car payments all need to be made first.  These are the most important financial obligations you have.  I know if you are one day late on your visa payment they are going to be calling you and your mortgage company will give you 30 days before they call.  It does not matter, pay your mortgage first!
  • Next, stay current on your tax obligations, utilities, and essential financial obligations.  It’s not going to do you any good to get your electric service turned off in order to pay a credit card, stay current on these obligations to avoid late fees and other penalties that you cannot afford.
  • Now that your house, car, taxes, and utilities are all current, you can start paying your other unsecured debts, credit cards, student loans, and medical bills.  You will see that this group of debt is last on my list because is needs to be last on your list to pay as well.  I see so many people that are current on everything except their first mortgage because their mortgage payment is their highest payment. When in theory this should be the first bill you are paying. 

Now obviously this advice only will work if you can afford to make all of you financial obligations.  This very well may be advice that I give to someone who may have fallen behind on some bills due to a job loss and now is back to working and I feel that they are going to be able to catch everything up without my help.  If you curious about your situation I offer a no obligation consultation where I will review you financial situation to see what path I think is best for you.  Sometimes that path is bankruptcy; sometimes that path is listed right above, you taking care of your own financial matters on your own. 

 

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.