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Questions About Bankruptcy

Get answers to general questions about filing for bankruptcy from our Detroit bankruptcy lawyer.


  1. How does bankruptcy work?
  2. What debts are discharged in a Chapter 7?
  3. How is Chapter 7 different than Chapter 13?
  4. What happens first?
  5. How can I stop wage garnishment or repossession?
  6. Will I lose all of my property in a bankruptcy?
  7. What should I do if I am interested in finding out more about filing for bankruptcy?

1. How does bankruptcy work?

Bankruptcy is a legal process that allows a person to substantially reduce the amount of debt they possess, or eliminate it entirely. There are several types of bankruptcy, and for individuals and married couples, the most common forms are Chapter 7 and Chapter 13.

2. What debts are discharged in a Chapter 7?

Chapter 7 bankruptcy allows for discharge of most unsecured consumer debt. These are debts that are not collateralized, but were taken on merely based upon the creditor's belief that the individual would have the ability to repay the debt. These are debts such as credit cards, personal loans, payday loans, and also overdue bills such as utility and phone bills, as well as medical bills, and some tax debts.

3. How is Chapter 7 different than Chapter 13?

These are two very different ways that are offered under federal bankruptcy law. In Chapter 7, the person must be below the state median in disposable income, and the person really has no hope of being able to pay back these debts. In Chapter 7, the eligible debts will be discharged when the process is complete, and it will take about 4 – 5 months for this to occur. In Chapter 13, the individual either does not want to lose certain property in liquidation, or does not qualify for Chapter 7. This form of bankruptcy makes it possible to pay back the debts over a 3 – 5 year period. This is the form of bankruptcy that could allow you to make arrangements regarding your home and mortgage during the process. At the end of the repayment period, any remaining debt is discharged.

4. What happens first?

The first step is to ensure that all requirements are completed accurately, and your full financial situation is fully disclosed in the means test – a requirement under law. You will also be required to have credit counseling from an accredited non-profit agency. All of these matters are important if you hope to have your petition approved. We can help with every detail, and it could not be more important, as if you fail to disclose any assets you could face legal trouble or be denied the ability to get the relief that filing bankruptcy can bring you.

5. How can I stop wage garnishment or repossession?

The first thing that occurs when you file for bankruptcy is called an "automatic stay." All creditor actions will be halted, giving you and your lawyer time to get these matters sorted out so you don't lose your whole paycheck or your car or other property.

6. Will I lose all of my property in a bankruptcy?

There are many types of property that are exempt when you file for bankruptcy. In fact, a large number of Chapter 7 bankruptcies are "no asset" cases, meaning the debtor relinquishes no property in the process of bankruptcy. Examples of property exemptions include:

· Homestead (up to a certain dollar amount)

· Vehicles (up to a certain dollar amount, or if there is only one vehicle to serve the needs of an entire family)

· Household appliances

· Tools of the trade

· Cash or bank accounts (up to a certain dollar amount)

· Retirement accounts

7. What should I do if I am interested in finding out more about filing for bankruptcy?

Our firm offers a free consultation to assist you. Take advantage of this offer and contact the Cartwright Law Firm and speak to us. We are here to serve you, and provide representation in bankruptcy throughout the areas of Detroit, Southfield, and Pontiac and other communities in the area.

Bankruptcy
Chapter 7
Chapter 13
Bankruptcy Exemptions
Bankruptcy FAQ
Bankruptcy Myths
Benefits of Bankruptcy
Creditor Harassment
Credit Repair
Discharging Debt
Debt Relief
Do I Qualify for Bankruptcy?
The Bankruptcy Process
FDCPA
Foreclosure
Life After Bankruptcy
Loan Modification
Means Test
Mistakes To Avoid
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Cartwright Law Firm, PLLC - Detroit Bankruptcy Lawyer
Located at 24750 Lahser Road Southfield, MI 48033. View Map
Phone: (248) 973-7834
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