Category Archives: Chapter 7

New Bankruptcy Means Test Numbers for 11/1/2011

Posted on October 26, 2011 | 9 Comments

The bankruptcy means test median household income numbers for Michigan have been udpated, effective 11/1/2011. The new household median incomes are:

  • 1 person household: $43,677
  • 2 person household: $50,079
  • 3 person household: $58,467
  • 4 person household: $70,237

For each individual in a household over 4, $7500 is added to the median.

This is a slight increase over the prior numbers and may enable more people to qualify for Chapter 7 bankruptcy.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

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Posted in Chapter 7, Income, Means Test, Michigan

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A Hidden Advantage of Not Reaffirming: the Freedom to Move

Posted on October 6, 2011 | 1 Comment

Guest Post by Atlanta Bankruptcy Attorney Peter Bricks.

I often grapple with chapter 7 debtors over getting them to understand that they do not really need to reaffirm their mortgage to keep their home.

The primary reasons I emphasize them not reaffirming is that the reaffirmation means the debt is not discharged in the bankruptcy, missed payments can continue to harm the debtors credit, the debtor will be liable in the future for a deficiency balance and the bank can still foreclose if payments are not made in the future anyway, regardless of whether the debtor reaffirmed or not.

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Posted in Chapter 7, Property, Reaffirmation Agreements, Real Estate

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How Much Can my Chapter 7 Banrkuptcy Trustee Can Take from Me?

Posted on October 5, 2011 | Leave a comment

Most Chapter 7 bankruptcy cases that I handle in my area of Michigan are “no-asset” bankruptcy cases, meaning that, after I  have exempted the filing individual’s personal assets from the bankruptcy estate created by the filing of the bankruptcy petition, there is nothing left available for the Trustee to liquidate (seize and sell off for cash) and distribute to creditors. In fact, the great majority of Chapter 7 bankruptcy cases filed anywhere are “no-asset” cases of this sort.

However, some cases are “asset” cases that do involve a transfer of assets from the filing individual’s ownership to the creditors whose debts he or she is discharging by way of the Chapter 7 Trustee assigned to the case, whose job is to do just that.

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Posted in Chapter 7, Exemptions, Michigan, Personal Property in Bankruptcy, Property, Real Estate

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Home Mortgage Loan Modification and Bankruptcy: Before, During and After Your Bankruptcy

Posted on September 29, 2011 | 6 Comments

The real estate bubble is one the primary culprits behind the rise in individual bankruptcy filings. Currently an astonishing 22.5% of home borrowers have home mortgage balances with negative equity. Many debtors therefore are looking for ways to reduce their monthly payments, if not get out of their home obligation entirely.

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Posted in Chapter 13, Chapter 7, Home Mortgages and Bankruptcy, Mortgage Modifications, Reaffirmation Agreements, Real Estate

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Will My Chapter 7 or Chapter 13 Bankruptcy Affect my Family?

Posted on September 7, 2011 | 1 Comment

One of the most common questions I receive from my potential Chapter 7 or Chapter 13 Michigan bankruptcy clients is with regard to the effect of an individual’s bankruptcy upon his or her family-members. Of course, there is at least an indirect effect: the income and debt-load of a family-member always has a general effect on those around him- or herself.

These potential clients mean something different than, though. They want to know what specific effect their bankruptcy will have on their spouse’s credit report, their children’s credit reports, employment prospects or business prospects of others in the household, ability to borrow student loans, and a host of other specific issues.

Generally, my response is that your bankruptcy will have no effect upon your family-members. However, there are a few instances where this may not be so.

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Posted in Bankruptcy Laws, Bankruptcy Planning, Chapter 13, Chapter 7, Employment discrimination, Marriage and Bankruptcy, Michigan, Student Loans

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Can a Chapter 7 Bankruptcy Trustee Sell My House after My Case Discharge?

Posted on August 30, 2011 | 1 Comment

The practice of a Chapter 7 bankruptcy Trustee seizing and selling real estate after it is surrendered in bankruptcy and then sold at foreclosure sheriff’s sale is a phenomenon may be primarily local to the Detroit, Michigan bankruptcy courts. However, it has become more and more common for a Chapter 7 bankruptcy Trustee, in this area, after a case has been discharged, to re-sell real estate that has been surrendered in the bankruptcy in order to gain proceeds from the sale that may be distributed to a bankruptcy debtor’s creditors—and, of course, net a percentage “fee” for the Trustee.

How is this possible?

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Posted in Chapter 7, Foreclosure, Home Mortgages and Bankruptcy, Michigan, Property, Real Estate, Tax debt, Uncategorized

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Is Income Tax Debt Dischargeable in Bankruptcy?

Posted on August 9, 2011 | 5 Comments

Income tax debt is, under some circumstances, dischargeable in Chapter 7 bankruptcy. Even outside of those circumstances, it is at least “treatable” in a Chapter 13 bankruptcy in a manner that can be a much better deal for the taxpayer than any of the payment schemes offered by the IRS.

Income tax debt, whether Federal or state income tax debt, is, for starters, classified as a “priority” claim by the Bankruptcy Code. In a Chapter 7 bankruptcy context, that means that, unless the debt meets certain criteria, it is non-dischargeable and the bankruptcy will not affect the filing debtor’s obligation to pay it. In a Chapter 13 bankruptcy context, “priority” classification means that the debt must be paid in its entirety within the Chapter 13 bankruptcy payment plan (60 months maximum).

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Posted in Chapter 13, Chapter 7, Debt Listing, Tax debt, Tax Returns and Bankruptcy, Uncategorized

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Did I Reaffirm my Mortgage Debt in My Bankruptcy?

Posted on July 26, 2011 | 1 Comment

In addition to consumer bankruptcy, my firm does a lot of non-bankruptcy debt relief work for Michigan consumers, some of whom have already filed a Chapter 7 bankruptcy with other law firms. Largely, these clients are attempting to save a home through a mortgage modification or other non-bankruptcy negotiation. The first question we have for these clients is: did you reaffirm your mortgage note obligation in your bankruptcy?

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Posted in Chapter 7, Home Mortgages and Bankruptcy, Michigan, Mortgage Modifications, Reaffirmation Agreements, Real Estate, Short Sales

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What Is the Value of my Small Business in Bankruptcy?

Posted on July 7, 2011 | 2 Comments

A business owned by an individual filing for bankruptcy is property that must be valued, listed, and exempted (protected) in the bankruptcy the same as any other piece of property owned by that individual. If the business is incorporated, it is a separate legal entity that may or may not be filing bankruptcy along with its owner’s personal bankruptcy, but, regardless, it is an item of some potential value that must be accounted for as an aggregate concern in the individual’s personal bankruptcy.

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Posted in Business Debt, Businesses in Bankrutpcy, Chapter 13, Chapter 7, Personal Property in Bankruptcy, Property

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Is My Personal Injury Settlement Protected in Bankruptcy?

Posted on June 28, 2011 | 1 Comment

A personal injury settlement in Michigan may be protected in bankruptcy in a number of different ways depending upon the classification of the settlement funds.

Personal injury settlements may be awarded by Michigan district or circuit courts for different purposes: lost wage replacement, medical expense damages, caretaker or nursing services, and punitive damages, to name a few settlement categorizations. Depending upon which of these categorizations applies to a specific sum of settlement funds, the settlement may or may not be protectible in bankruptcy.

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Posted in Bankruptcy Laws, Bankruptcy Planning, Chapter 7, Civil Judgments and Bankruptcy, Exemptions, Medical Bills, Michigan, Personal Property in Bankruptcy

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