Bankruptcy FAQ

Common Questions About Bankruptcy in Detroit

Do I have to hire an attorney to represent me?
You are legally entitled to represent yourself in bankruptcy, which is known as a pro se filing, but to achieve the best possible result it is highly advisable to work with an experienced bankruptcy attorney. Having legal representation can help you avoid missing filing deadlines and errors in providing information to the court which could result in your petition being dismissed. There is also the possibility that you could end up only partially discharging your debt.

What is the difference between Chapter 7 and Chapter 13?
Chapter 7 is referred to as "straight bankruptcy" or "total liquidation" and it results in a swift discharge of debts. Before you can file Chapter 7, you will have to pass a means test of your income and monthly expenses. Chapter 13, also called "a wage earner plan," is a way of restructuring a full or partial repayment of your debts according to your ability to comfortably repay.

Does bankruptcy remove all of my debt?
While bankruptcy may release you from non-secured debts, it does not include things such as student loans, car loans and mortgages. It is because these other types of loans are secured by collateral that bankruptcy does not cover them. It also depends on which form of bankruptcy you qualify for. Chapter 7 allows for a large amount if not all of your consumer debts to be relinquished, however, Chapter 13 debts must still be paid back but in different installments.

How long does it take?
The Chapter 7 process will typically take about six months with one mandatory court appearance. The Chapter 13 process will take longer, between three and five years depending on your particular circumstances, with two mandatory court appearances. In either case, you will receive immediate protection against creditor actions such as wage garnishment and repossessions through an automatic stay as soon as we file your petition.

Will bankruptcy destroy my credit?
Declaring bankruptcy will have a negative impact on your credit, but if you are struggling with debt it is likely that your credit score is already suffering. When you complete the process, you will no longer have such a high debt to income ratio, and you will be able to begin saving money for the future. By carefully managing your finances and using strategies for credit restoration, you may soon have a better credit score than you do now, and within 10 years the bankruptcy will disappear from your credit report.

Will I lose all of my possessions?
This is a common myth that keeps a lot of people from considering bankruptcy. While filing for Chapter 7 bankruptcy does allow for liquidation of your personal assets, there are many exemptions that you can file for. It is not a common for an individual to lose everything they own or lose their home. There are often options including short sales and foreclosure defense that may enable you to keep your house. Working with an experienced and knowledgeable bankruptcy attorney can help you understand what path to take. They are skilled at finding necessary exemptions that allow people to keep their things.

Do you have any further questions about bankruptcy in Detroit?

We also have a handy guide to some common bankruptcy terms. If you want answers specific to your personal circumstances, please do not hesitate to contact the Law Offices of Marshall D. Schultz today! You can request a free case consultation, and we can start discussing your legal rights, as well as your personalized options for debt relief and credit restoration.

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When you have questions about getting out of debt, contact the Law Offices of Marshall D. Schultz. We have filed more than 10,000 consumer bankruptcy cases and with over 33 years of combined experience, we can help you find a solution to your problems. Having achieved a positive rating on the premier legal ranking site, Avvo®, we are prepared to give you the personal attention that you deserve. Do not wait any longer to feel relief from your debt and move forward with your life.