When Chapter 13 Bankruptcy Is Better Than Chapter 7

If you’ve reached the point where you’re swimming in debt and can’t pay your bills, you may be wondering which type of bankruptcy is best. You may need a Chapter 7 bankruptcy lawyer or a Chapter 13 bankruptcy attorney. There are differences between each type.

Bankruptcy is never a simple process in the United States. Each type depends on your current income, assets, debts, and future financial goals.

Chapter 7 bankruptcy is a type of liquidation bankruptcy that will clear out any unsecured debts you may have, including medical bills, and credit card balances. To declare Chapter 7 bankruptcy, you must currently have no income or little income. If you make over a certain amount of money, you’ll automatically have to claim for Chapter 13 bankruptcy.

Chapter 13 bankruptcy is a type of reorganization bankruptcy. You must have a regular income and be able to pay back a portion of your debts through a repayment plan. There can be many benefits for filing for this type of bankruptcy than Chapter 7.

Chapter 13 bankruptcy will allow you to catch up on your missed mortgage payments. It may also allow you to clear unsecured liens on your house. This means that you will be able to keep your house, unlike filing for Chapter 7 where you can lose your property. You may also keep your nonexempt assets. How it works it that you pay back all or a portion of your debts through a repayment plan. This plan is based on your current income against expenses, and what types of debt you may have. Therefore, it’s commonly referred to as “reorganization bankruptcy”.

Another benefit is that Chapter 13 will allow you to get caught up with car loans without losing your car, and to pay off other non-dischargeable debts including alimony or child support arrears. In order to hire a Chapter 13 bankruptcy attorney, you must be an individual and not a business. For Chapter 13, you must not have more than $394,7255 of unsecured debt or $1,184,200 of secured debt. While the discharge is a lot longer with Chapter 13 than Chapter 7, 3-5 years versus 3-5 months, you’ll receive a full discharge.

It’s important to note that if you own property, Chapter 13 is a lot better than Chapter 7, as debtors will be able to keep all their property, whereas the trustee in Chapter 7 will sell your property to pay off your creditors. Your liens will also be stripped in Chapter 13, whereas in Chapter 7 they are not, leaving you with future debt loads to pay off in the future.

Before deciding which type of bankruptcy is right for you, you should talk to a Chapter 7 bankruptcy lawyer, or a Chapter 13 bankruptcy attorney, to get the best advice that pertains to your financial situation. You may just discover that you do qualify for Chapter 13 and will be able to keep your house and car!

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Not All Debts Are Treated Equally When Filing For Bankruptcy

With a struggling economic climate, millions of people file for bankruptcy every year for varied reasons, most notably due to medical expenses, reduced income or job loss. According to US bankruptcy court statistics, personal bankruptcy has increased at an alarming rate and not just as a result of irresponsible spending, but because something like a divorce means taking on a partner’s debt if you had “regrettably” co-signed or opened joint accounts with them.

Filing For Bankruptcy

Unexpected catastrophes can also quickly drain savings that took years to accumulate including mountains of student loans, the rising costs of utility payments, inflation, foreclosure the list is endless. Bankruptcy laws are in place to give people whose finances have collapsed and need a second chance to start over. According to statistics from the American Bankruptcy Institute, nearly 95% of Chapter 7 bankruptcy cases decided in 2016 were discharged, meaning the individual was no longer legally required to pay the debt. But what about the other 4.5%?

If you are contemplating bankruptcy, you should consider discussing your options with an experienced bankruptcy attorney who works on liquidation bankruptcies where most of your debts are discharged or liquidated under bankruptcy law. A bankruptcy lawyer will also help you in compiling all your financial records, including debts, assets, income, and expenses.

The Length of Bankruptcy Process

Once you have filed for bankruptcy, the process usually takes six months or longer to complete, but the good thing is that during this time it triggers the automatic stay that prevents creditors from calling you, suing you, sending you letters, or even repossessing your property.

Items Not Discharged In Bankruptcy

When your petition is accepted, your case is assigned to a court trustee who then sets up a meeting with your creditors that you must attend. But not all petitions are accepted, for example; student loans are not discharged under a declaration of bankruptcy owing to the fact they are funded or guaranteed by the government and students are required to pay them off once they start working.

Another example of a non-dischargeable that can’t be in a Chapter 7 bankruptcy at are debts from a divorce because they are owed to a spouse but not as a domestic obligation. However, they can be included in a chapter 13 bankruptcy provided the debt becomes part of a payment plan, and the overdue payments will be continued and paid in full.

A debt incurred through fraudulent means, including one that was obtained to take advantage of the bankruptcy code, cannot be discharged. Unemployment benefits overpayments that you may be required to repay the excess, tax penalties, fines on speeding tickets and vehicle registration fees will also not be discharged in a bankruptcy.

Also, fees that are considered a priority debt, meaning you owe the federal government or local state in payroll taxes, past tax debts from previous years, current tax liability, any fees or penalties cannot be discharged under a declaration of bankruptcy, therefore, you must make an effort to pay or deal with the IRS directly.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.


It’s A New Year and Time for You to Get Your Finances In Order

It’s now 2018 and time to get a new start on your life. If your finances have suffered miserably in past years, it’s now a new year and time for you to get your finances in order. Many people have increasing amounts of debt from mortgages, car loans, student loans, medical bills, and credit card debt. Often it can become unmanageable and you can feel like there is nothing to look forward to.  There is help, there is a way to forgive some or all your debts.  A bankruptcy attorney can help facilitate filing for chapter 7 or chapter 13 bankruptcy.

Filing for the Right Chapter

Without the assistance of a local bankruptcy attorney many people end up confusing the two chapters of bankruptcy. To get back on track in life, you should have a solid understanding of what each one offers to your future, and your finances. It can be a serious condition to have to file for bankruptcy, and both can affect your future.  It’s important to file for the one that’s right for you, so you can get back to good finances in the future.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a certain liquidation bankruptcy that is made to rid you of unsecured debts. These may involve credit card debt or medical bills. To qualify for chapter 7 bankruptcy, you must currently have no income, or little disposable income. If you make too much money, you automatically must file for Chapter 13 instead.

Chapter 7 bankruptcy involves selling any property that you own so creditors can be paid back. If you have no assets, they won’t get anything. This type of Chapter 7 bankruptcy is best for low income or no-income people who have few or no assets.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is best for debtors who have a regular income. They can pay back at least some of their debts on a regular payment schedule. This is the path you’ll take if you don’t qualify for chapter 7. Even if you qualify for chapter 7, many debtors may decide to go the route of chapter 13. This is because there are additional benefits in 13 that 7 doesn’t have.

The benefits of chapter 13 bankruptcy include the ability to catch up on missed mortgage payments without losing your home. You may also be able to remove any unsecured junior liens from your house.  With chapter 13 bankruptcy, you’ll be able to keep your house or property. This will also include non-exempt assets. To qualify for chapter 13, you must repay your debt through a special repayment plan.

The amount you pay back will depend on your current income, expenses, and your type of debt. Therefore chapter 13 is commonly called a reorganization bankruptcy. It’s meant strictly for debtors who can afford to make monthly payments and get caught up on car payments, child support arrears, or alimony debts.

Know Your Rights

It’s important to be aware of your rights if you choose to file for chapter 7 or chapter 13 bankruptcy. Choose the route that’s most pertinent to you. Now you’ll be on your way to financial freedom.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.


Complications of Bankruptcy When Paperwork Is Filed Improperly

Imagine that you are drowning in debt. You turn to the bankruptcy courts in hopes to petition them to release you from the liability of your debt, only later to be told there are legal discrepancies involving your paperwork.  The frustration that is felt can be overwhelming.  It is important to work with an attorney that specializes in bankruptcy to assist you in all aspects of filing.

Filing for bankruptcy with the assistance of a lawyer is the best way to ensure that you are following the proper steps.  However, it is important that you have some knowledge regarding the bankruptcy process.

Important Information When Filing For Chapter 7 or 13 Bankruptcy

  • Before a judge will agree to discharge your debt you will be required to get mandatory credit counseling. This usually will occur during the six month period prior to filing for bankruptcy.
  • In order to prove that you can pass the chapter 7 bankruptcy means test, you are required to file a wallet of forms in court. This includes a bankruptcy petition, a number of forms listing financial information, and an income and expense form.
  • The court will appoint a bankruptcy judge to handle your bankruptcy case thus including processing your paperwork and petitioning the court.
  • You will receive a notification from the court telling you when the meeting of creditors will take place. During this meeting you will be asked vital questions under oath, with your attorney present, about your personal finances and bankruptcy forms.
  • At some point during this process your eligibility to file for Chapter 7 bankruptcy will be confirmed or denied.
  • All of your nonexempt property will be reviewed and handled as will your debts that have been backed by collateral.
  • Before you get your bankruptcy discharged you will be required to take a financial management course. Upon approval you will receive your bankruptcy discharge.  This usually occurs three to six months after you first file for bankruptcy.

Why Using A Professional Is Best

Although the main reason for declaring bankruptcy is to give those in debt a chance to start their financial life with a clean slate, bankruptcy still remains on your credit report for 7 – 10 years. This process is lengthy and costly therefore the last thing you need is your paperwork to be filed incorrectly.  This is one of the many reasons that filing for bankruptcy is best done using an attorney specializing in bankruptcy law.

Providing accurate and truthful information to your bankruptcy lawyer about every aspect of your financial situation on the papers you file with the court is always recommended in order to avoid misfiled paperwork. The following are common mistakes that can cause serious complications when filing for bankruptcy:

  • Filing for bankruptcy without cause or filing the wrong type of bankruptcy, under the wrong chapter
  • Failure to complete and file the right forms
  • Failure to exempt your property
  • Transferring your assets before filing for bankruptcy
  • Failure to attend your meeting of creditors hearing

Fixing Mistakes

Filing an amendment to your bankruptcy petition and informing your bankruptcy attorney is one way to fix the mistakes on your petition. Whether the mistake was premeditated or innocent, failure to amend your petition and in a timely manner will raise suspicion about the accuracy of your petition, especially if the “mistake” ultimately allows you to keep more money or property than you are permitted to, and you may have unwittingly opened yourself up for investigation by The Federal Bureau of Investigation (FBI).  An improper disclosure of all relevant information to your bankruptcy attorney will also result in the denial of your discharge.  This is why it is so important to have proper representation throughout the bankruptcy process.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Choosing A Bankruptcy Attorney

It’s important to remember that bankruptcy is always considered a negative thing to have within your credit history. It will have a serious impact on any kind of credit loans in the future. With that said, sometimes the process of filing for bankruptcy is the best course of action for the situation you are in.  It is possible that you can and will bounce back with the help from the right bankruptcy lawyer.

Knowledge On Your Options Is Key

Understanding the difference between the various options for filing for bankruptcy is going to be important as well. You need to have a clear idea of what you can expect to do when you are involved in this kind of situation. A good bankruptcy lawyer is going to give you proper advice on what kind of procedure is going to be the best for you.

Understanding the differences between chapter 7 and chapter 13 bankruptcies is essential for you to make a good decision. Once you are able to hire an efficient lawyer for this purpose, you should be able to understand the difference and the consequences of each of those different options.

Your Credit Score Should Recover

The process of maintaining a good credit history is important, but don’t expect filing for bankruptcy to be some kind of final nail on your credit score possibilities. This is something that many people end up doing and they are able to recover from it, so don’t see it as some kind of extreme measure that is impossible to bounce back from. Just see it as something that is going to help you when there are no other viable options for you.

If you want to know as much as possible about chapter 7 and chapter 13 bankruptcies are the best thing to do is to schedule an appointment with a competent lawyer. One that is going to be able to help you clear any doubts you might have. Once you do this, you are going to be able to get the most reliable outcome when you finally decide to file for bankruptcy in order to put your finances back in order.

There Is Nothing To Fear

This process is not the end of the world and you should not be ashamed of having to go through it. It happens to major corporations and to wealthy individuals all the time. It happens to highly successful people and even to those who always play it safe. The only thing you can do is be prepared if you need to do this at any point.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

The Best Bankruptcy Option For Your Situation

Have you ever been overwhelmed by debt? Have you ever considered if bankruptcy was the next step in your financial recovery? There are numerous advantages and disadvantages that come with filing for bankruptcy. We will look into common myths that surround bankruptcy and when it may be the best option for you.

Bankruptcy is an arrangement in federal law that allows individuals and businesses to get a reprieve from their debts and to get a fresh financial beginning. This system allows honest individuals who have fallen on hard times to get on with their lives without the harassment that comes from creditors.

There are two common categories within bankruptcy law that can be declared: chapter 7 bankruptcy and chapter 13 bankruptcy. In the most basic terms chapter 7 bankruptcy liquidates non-exempt assets and the proceeds are used to pay off creditors. This is a solid option when there is a large amount of unsecured debt to be covered by a small income. Chapter 13 bankruptcy helps individuals and businesses to reorganize and adjust their debts while using a repayment plan to cover the outstanding debt. This is a good option for those debtors that have an income and want to avoid foreclosure and catch up on outstanding bills.

A major advantage of filing for bankruptcy is that creditors are on notice to stop trying to collect outstanding debts from you. This means that they no longer can call you, send you letters, file lawsuits, garnish wages or seize your assets.

A major disadvantage in declaring bankruptcy is the devastation it wreaks on your credit score. Another issue that arises in bankruptcy is that certain non-exempt assets can be sold and debts from mortgages, student loans, taxes, alimony and child support cannot be discharged.

There are many myths in bankruptcy. One myth is that by just stating you want to file bankruptcy you have declared bankruptcy. This is not true. For bankruptcy to be legal you must file the right paperwork, go to credit counseling and pay the fees. It all reality it is best that a bankruptcy attorney is hired to facilitate the process to avoid legal complications from arising with improperly filed paperwork.

Another common myth is that you can go to jail for owing money. This is untrue. It is not against the law to owe money no matter how aggressive the debt collector is. One myth is that by just stating you want to file bankruptcy you have declared bankruptcy. This is not true. For bankruptcy to be legal you must file the right paperwork, go to credit counseling and pay the fees. It all reality it is best that a bankruptcy attorney is hired to facilitate the process to avoid legal complications from arising with improperly filed paperwork.

Another common myth is that you can go to jail for owing money. This is untrue. It is not against the law to owe money no matter how aggressive the debt collector is. Yes, creditors can sue you or take you to court but they cannot send you to jail.

Consider filing for bankruptcy if you are unable to meet your financial obligations. If you have been work for an extended period of time, delinquent on your taxes, nearing foreclosure on your home, having your wages garnished or pending a law suit on delinquent bills it may be time to meet with a bankruptcy attorney to further look into the benefit bankruptcy may have for your financial future.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief athttp://www.bohikianlaw.com/ today.

Knowing When It Is Time Seek A Bankruptcy Attorney

When it comes to filing for bankruptcy different thresholds exist for when it is time to call it quits and throw in the towel.  For many clients filing for bankruptcy comes after months of calls from creditors threatening to garnish wages or threatening to take you to court for not paying your debts.   The media bombards us with nightmarish tales of bankruptcy and the stigma that we assume will follow often deters seeking assistance.  With all this going against you how do you truly know when it is time to throw in the towel, meet with a bankruptcy attorney and file for bankruptcy?

If you think you are reaching the financial danger zone there are a few questions you can ask yourself to determine if there is a way out or if bankruptcy is the only option.

First, look at the payments you are currently making on your outstanding debts.  Are you only making the minimum payment?

The next thing to address is the issue of creditors and harassing phone calls.  Do you find that you can’t make it a day without getting a phone call from someone that is seeking to collect on a debt that you owe?

When you begin to think about getting your financial house in order and sort out your finances do you get nervous?  Are you plagued with nightmares when you think about creating a budget?

Have you taken the time to add up the exact amount that you owe?  Is debt consolidation a consideration?  Does the amount of money that you have coming in make it feasible to buckle down and get ahead within the next five years?

If you can answer yes to any two or more of the questions listed above then it may be time to seek out the advice and counsel of a local bankruptcy attorney.  Bankruptcy is a definite option to assist you through uncertain financial times.   If you owe more than you can afford to pay while continuing to live a minimal standard of living then it is time to give bankruptcy a fair consideration.

You can seek relief from bankruptcy by voluntarily filing or if creditors ask the court order you to file for bankruptcy protection.  In either situation you will want to consult with a bankruptcy attorney to determine the next course of action for your current circumstance.  There are two different types of bankruptcy laws you can file for protection under: chapter 7 and chapter 13.  Meeting with an attorney that specializes in bankruptcy will allow you to proceed in the most appropriate manner.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Reasons Behind Filing For Bankruptcy

Why do people end up filing for bankruptcy?  This is a question that is often posed to bankruptcy attorneys and the answer people expect to get back is that people just aren’t responsible with their credit cards.  This however, more often than not, is not the reason people end up faced with the option of bankruptcy.  In fact most people that are facing bankruptcy dread being there.  It isn’t a decision that has been made freely.  In fact, most people are almost forced into it after spending months on end of harassing calls from creditors and such.

One of the most commonly seen explanations for people looking into bankruptcy is because of illness or disability.  When a family member becomes ill the entire family has to adjust.  This may mean that the family is left without the same budget that they have become accustomed to.  An illness can fall on a parent or child contributing to a change in income.

Not only does the expense of medical care come into play but the loss of income when time off is needed to provide care.  This leaves many families falling behind on bills as payments that were being made were based off of the excepted income to stay the same.   This is a common development that bankruptcy attorneys see in family’s seeking debt relief under federal bankruptcy.

Another common reason that people find themselves filing for debt replied is unemployment.  When individuals are out of work and unable to find a source of income it becomes pretty difficult to pay your bills.  Often what we see is that people will go a period of time without a job and begin to fall short on paying their bills.  As payments start to add up, even after a person does find employment it is difficult to dig them out of the hole they have found themselves in.  For instance, a thirty thousand dollar debt at twenty percent interest is difficult at best to pay off when making only forty five thousand a year.  The debt starts to become overwhelming and leads to desperation.

About thirty percent of people that are going through bankruptcy have also divorce within the past five years.  The ramifications of a divorce aren’t often felt till a few years after the dust has settled on the process as a whole.  This is especially true of women who find they are raising children in a single parent home collecting less than needed to live and raise children.  They begin to fall back on the old standby of payday loans, credit cards and personal loans.  Eventually this catches up to them and they find that there is nowhere else to turn.

There are a number of myths that surround individuals finding they are at need to look into bankruptcy debt relief.  Don’t fall victim when it comes to categorizing things in a simplistic manner.  Most people going through bankruptcy are doing so because they are all out of options and they have nowhere else to turn.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Misconceptions Surrounding Bankruptcy

There are several misconceptions surrounding bankruptcy and the individuals who seek the relief it can offer.  The biggest one of them is assuming that all individuals who are seeking financial reprieve through bankruptcy have done so because they couldn’t fight the urge of credit card spending.  This however, is not the case for many of the people that find that they are in need of filing bankruptcy.  Here’s a look at some of the other folklore surrounding bankruptcy.

Individuals that file for bankruptcy are financially irresponsible: Although there are some cases in which individuals need to file for bankruptcy because of their own financial irresponsibility this is not always the case.  It is more likely that an individual finds themselves in this situation because of one of the following events: job loss, divorce or illness.

Bankruptcy clears away all past debts: If you are looking for a be all to end all for debts, bankruptcy is not where you will get it.  Not all debt can be cleared away when filing for bankruptcy.  Several, including alimony, child support, restitution from a crime, tax debt and student loan expenses are just a few of the debts that cannot be expunged.  Although bankruptcy does give individuals a fresh financial start it does not completely clear you from all of your outstanding debt.

It’s a good idea to spend with reckless abandonment before bankruptcy:  People should not assume that just because they are about to file for relief that they can max out their current credit.  In the eyes of the court, this type of behavior is seen as fraudulent.  Many times the debt that is racked up in the ninety days before your discharge will need to be paid back.  You will not get away with spending recklessly and expecting it to be discharged.

Bankruptcy permanently ruins your credit: Although it is more difficult to obtain credit in the months after you have filed for bankruptcy it is not impossible.  Most bankruptcy attorneys and financial advisors recommend obtaining a secured credit card when you first are relieved of your debt through bankruptcy.  A secured credit card can be obtained through a bank or other financial institution.  This type of credit card requires a bank deposit to be drawn against.

If you are considering bankruptcy to get relief from debt that is piling up and creditors hounding there are still some things to think about.  First is the expense of filing for bankruptcy.  Hiring an attorney to represent you in filing for bankruptcy is the best option.  This can cost between nine hundred and fifteen hundred dollars depending on your attorney and the area in which you reside.

It is also crucial to consider the difference between chapter 13 bankruptcy and chapter 7.  In chapter 13 bankruptcy the court will assist you in reorganizing your debt and you will be in charge of paying expenses, like your house payment and such while living very modestly.  Chapter 7 discharges certain debts but in doing so you could have to sell secured assets to assist in paying some of your debt back.  Talk with a local bankruptcy attorney to see what option is the best for your situation.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Is It Finally Time To Talk With A Bankruptcy Attorney

How do you know if it is finally the time for you to throw in the financial towel and start a serious discussion about filing for bankruptcy?  The term itself is one that invokes an array of emotions: failure, sadness, defeat, relief, disappointment and more.  Bankruptcy doesn’t just involve individuals it is also something that can occur to corporate companies.  In a world where living in debt seems to be the norm how do you know when it is time to finally call it quits and meet with a bankruptcy attorney to seek relief.

When assessing if you are in the financial disaster zone there are a few questions to ask yourself.

1)      Is it only financially possible for you to make the minimum payment on your credit cards?

2)      Do you have bill collectors calling you on a regular or semi-regular basis?

3)      When you think about sitting down and working out a plan for your financial future are you scared?  Do you feel like your life is spinning out of control?

4)      Are you using your credit cards for necessities such as gas and groceries?

5)      Have you considered debt consolidation?

6)      Does it make you nervous to total the amount you actually owe?

If you have answered yes to more than one of the questions about it is possible that you need to give our financial situation a serious look.  Bankruptcy is a very viable solution when you actually owe more than you can afford on a regular basis.

The first step is to make a list of your liquid assets.  This should include items such as real estate, stocks, bonds, college savings accounts, non-bank assets, real estate and more.  A rough estimate of these figures should be good enough for these purposes.

The next step is to create a detailed list of bills and credit card statements.  When the value of your assets is less than the amount of debt that you owe one way out of this situation is speaking with a bankruptcy attorney and declaring bankruptcy.  This is not an issue that is ever easy.  Bankruptcy is not a simple, sure all for debt that is spinning out of control.

Bankruptcy can happen in two different manners.  The most common routes for individuals and corporations is to voluntarily consult with an attorney who will assist you through the proper channels in filing bankruptcy.  A second manner in which bankruptcy is filed is that creditors ask the court to order individuals into bankruptcy.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.