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According to the Administrative Office of the US Courts, there were nearly 1.8 million bankruptcies filed in the year ending March 31, 2006, up from just over 1.3 million in the year ending March 31, 2001. To help sort your way through the complicated maze of overcrowded bankruptcy courts, you need the assistance of knowledgeable legal advocates, with years of experience and demonstrated trustworthiness.
Detroit, Southeast Michigan – Bankruptcy Attorneys
Whether you eventually choose to file Chapter 7 or Chapter 13, understanding the concepts, processes and misconceptions surrounding bankruptcy can help inform that decision and empower you to move more confidently toward your goal of financial freedom. At the Great Lakes Bankruptcy Center, PLLC in Southeastern, Michigan, we give our clients the tools they need to make important decisions and the support they need to actualize them.
To speak with our attorneys about making a fresh start through bankruptcy, contact us today. Please call 800-903-1258.
Understanding the Most Common Bankruptcy Terms
As you begin the process of determining eligibility for bankruptcy and then what type of bankruptcy to file for, it is important to understand a few key terms:
Means Test — This test is the beginning inquiry to determine whether a person qualifies to file for Chapter 7 and what other options are open to him or her. This is a basic debt-to-income test that, far from being a death knell, is a preliminary step in getting out of debt and stopping hounding creditors.
Discharge — Discharge of debt is a removal of responsibility from having to pay unsecured loans. This is the end result of declaring Chapter 7 bankruptcy.
Petition — Petitions are documents filed with the bankruptcy court for relief pursuant to the applicable chapter of the Bankruptcy Code. It often includes various schedules and related documents.
Credit Counseling — Under the new code, speaking with a certified credit counselor is mandatory and can be accomplished with a simple telephone call. This conversation is straightforward and should never be seen as a hurdle to overcoming financial difficulty.
Fresh Start — Although the term does not appear in the bankruptcy code, the United States Supreme Court has recognized as far back as 1885 that the purpose of the bankruptcy act was to allow a debtor to keep what property was exempted by law, discharge certain debts, and have a fresh start. See Traer v. Clews 115 U.S. 528, 541, 6 S.Ct. 155, 160 (U.S.1885).
These preliminary terms will help you have a better grasp of your situation when you speak with our attorneys about bankruptcy.
Myths and Misconceptions
Hiring a lawyer will only add to my mounting debt.
We understand the financial pressure you are under and will devise repayment plans that will work for you. If you are filing for Chapter 13, you may be able to incorporate your legal fees into the debt reorganization.
I will have to spend a great deal of time in court.
Most bankruptcy cases never end up in court. In most cases, you will never have to appear before a judge or jury.
I’ll never be able to obtain credit after bankruptcy.
After bankruptcy, most of your debt is cleared. Credit card companies will see you as a much better credit risk than someone who continually has debt. Our center can put you into contact with bankruptcy-friendly lenders.
My credit record will be irreparably damaged.
A credit record is damaged through inability to make or meet minimum monthly payments, not through filing for bankruptcy. After bankruptcy, as long as you are responsible with subsequent cards, your credit score will actually improve.
I’ll never be able to buy a car or home after bankruptcy.
Because you should be able to obtain credit following a bankruptcy, you should have little difficulty in making important purchases such as buying a house or car. You should also have very little trouble renting an apartment.
Declaring bankruptcy makes me look like a bad person.
This perception is completely false. Congress designed bankruptcy laws to help people with acute financial problems to make a new beginning. Emerging from debt is far better than remaining in debt and worsening your situation.
I can file for bankruptcy without the help of an attorney.
While this statement is technically true, it is not advisable to file on your own. An experienced bankruptcy attorney can apprise you of opportunities and pitfalls that you may not be aware of. In addition, a lawyer can ensure your bankruptcy is handled smoothly and efficiently.
I can eliminate debt through a debt counseling service without having to declare bankruptcy.
A debt counselor can only help you reorganize debt and try and negotiate plans with creditors. This does not put an end to harassment, nor does it completely eliminate the debt. An attorney helping you to declare bankruptcy can put an immediate stop to harassment, foreclosure and repossession.
Student loans and taxes are never discharged in bankruptcy.
In very specific circumstances, student loans may be included in the liquidation of debt. Also, when declaring Chapter 13, you may include student loans in your repayment plan, which can save you money.
Congress has made it impossible for the ordinary person to declare bankruptcy.
While recent bankruptcy legislation has made Chapter 7 bankruptcy filing a more difficult option to qualify for, you may still be able to qualify for Chapter 13 reorganization bankruptcy. Call us for a consultation to discuss your options.
For more information on filing for bankruptcy, and how we can assist you, contact the Great Lakes Bankruptcy Center, PLLC today.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
