Bankruptcy Rules & Tips

Bankruptcy Tips & Rules to Follow

Detroit Bankruptcy Attorney

Even though there is much at stake and much to learn about the bankruptcy process, you can confidently face these difficulties with the right legal advice. When you face tangles in the process, the Law Offices of Marshall D. Schultz can help you. Better yet, the sooner you act, the more likely it is that we can help keep from making costly mistakes in the first place. Our experienced bankruptcy attorneys can guide you to a brighter financial future with tested advice and skilled representation.

Things to Know Before Bankruptcy

Even if you are not sure that you are going to file, there are actions you can take to prepare in case you need to pursue bankruptcy. For example, if you want to keep any of your vehicles, then you will need to keep up regular payments. If you are behind on these payments and you go into bankruptcy, a trustee may liquidate your car to satisfy creditors.

You will probably want to give a friend or relative a security interest in your property when you take a loan from them. This can bring such benefits as reducing equity and increasing your chances of keeping non-exempt property, such as your car. If your car, for example, does have to be sold to pay off your debt, then your relative or friend will get some of his or her money back from the sale. This only works if the security interest is documented and given at the same time that you are borrowing the money.

What You Need to Avoid

If you enter bankruptcy, your 401k, IRA, and ERISA accounts may be left untouched. So do not take anything out of these to pay your utility bills or anything else. You could be hit with penalties and taxes that cannot be discharged. Regardless of what happens with bankruptcy, you should be able to have these accounts to turn to for the future into retirement. Keep these safe. You also should never take money from your home to pay unsecured debt, such as medical, credit card, or utility bills. A second mortgage can mean that you will now be on the hook for a debt that would otherwise have been discharged in bankruptcy.

Strange as it may sound, you also cannot repay $600 or more to relatives or coworkers from whom you borrowed. If you pay $600 or more within a year before you file for bankruptcy, then this makes them "preferred" creditors. This means that a trustee may take some of this money away from them to pay other creditors, to keep everything equal. This is definitely not something you want to let happen to the people who helped you out. You also should not commit fraud. It is worth mentioning because this can be done unwittingly. You have to keep your property in your name, as you cannot put someone else's name on it in an attempt to save it from liquidation. Not only is this illegal, but it can keep you from being able to discharge the debt. Creditors and trustees can further take the property away from you if you do this. Do not walk into this common pitfall!

After Filing for Bankruptcy

Once you are in the process of bankruptcy, there are more things to bear in mind. If you filed for Chapter 13 bankruptcy, you will want to consult a Detroit bankruptcy lawyer about your restructuring plan. You want to be sure that your rights are being protected. You also will want legal counsel about any actions you take with your assets, and you will not want to miss a single payment. If you take the right steps, you could be on your way to financial recovery and then financial stability.

If you filed for Chapter 7 bankruptcy, then you will want to keep up regular payments on any car you want to retain. You also will want to contact an experienced bankruptcy attorney when you receive your Notice of Meeting of Creditors, a mandatory court hearing that will require a great deal of preparation. You should consult a bankruptcy attorney before you part with any assets, even if you are selling them or giving something as a gift. Under Chapter 7, your assets can be liquidated by a trustee to satisfy your creditors. Until bankruptcy is over, you should not touch your assets. Fortunately, it is a process that only takes a few months. With the right attorney, you may not have to lose anything important to you.

You also do not have to be stressed about creditors calling you. The "automatic stay" puts a hold on most debt collection, giving you some relief. If a creditor does contact you after you have filed for bankruptcy, you can forward a copy of your Notice of Meeting of Creditors, or direct them to your attorney.

Find Trusted Legal Counsel from a Detroit Bankruptcy Lawyer

At the Law Offices of Marshall D. Schultz, we have had more than 50 years of combined legal experience that we could put to work for you. Attorney Schultz alone has assisted more than 10,000 individuals through the complexities of bankruptcy. We are familiar with the various issues that can spring up in bankruptcy, and how to avoid them. We are further well-versed on how to help our clients successfully face bankruptcy and come out on top.

When you have any questions about bankruptcy, feel free to contact our firm. We are able to provide you the counsel and representation you and your family need.


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