Law Office of Dean E. Sheldon III

"A Holistic Approach to Bankruptcy"

free 3 minute bankruptcy evaluation online!
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FREQUENTLY ASKED QUESTIONS

 How do I know if bankruptcy is the best thing for me and my family?

  • Are you heavily in debt with little prospect of getting out of that debt in the near future?
  • Have you had, or are your creditors threatening foreclosure on your home or,  repossession of your car?
  • Have you experienced a drop in income that you don't realisticly know when or how it will be replaced?
  • Are you frequently late paying bills, incurring outrageous late fees?
  • Do you only pay the minimum on your credit cards?
  • Are you unable to make even the minimum payments?
  • Has the interest on your credit cards been increased dramatically?
  • Do you have to sacrifice basic necessities just to make ends meet?
  • Are you paying more money than you make on just your monthly living expenses?
  • Are you losing sleep at night wondering how you're going to make it?
  • Have you bounced more than one check in the last two months?
  • Are your wages in jeopardy of being garnished?
  • Have you recently become disabled?
  • Are you going through a divorce resulting in a decrease of income and an increase in expenses?

    If you answered yes to some or a number of these questions, bankruptcy could be right for you. Your next step is to call Dean Sheldon. You need to be informed to make the right decision.  Let's be frank; your credit has probably taken a major hit already. Why continue struggling to make payments but never get ahead?  Be proactive and resolve the situation now.

What are the definitions of some commonly used terms in bankruptcy?

  • Bankruptcy - A legal proceeding in federal court in which an individual or company may be released (or "discharged") from all or a portion of their debts.
  • Debtor - The person or company filing bankruptcy.
  • Trustee - A person who administers a debtor's estate. A trustee is always appointed in a chapter 7, 13, or 12 bankruptcy. A trustee may be appointed in a chapter 11 case.
  • Creditor - The people or companies to whom a debtor owes money or property. Creditors have claims against the debtor.
  • Proof of Claim - A proof of claim is a written statement filed with the court describing the debt that a creditor claims the debtor may owe them.

 

What area does the Traverse City bankruptcy courtroom serve?

Antrim, Benzie, Charlevoix, Emmet, Lake, Kalkaska, Leelanau, Grand Traverse, Manistee, Mason, Missaukee, Osceola and Wexford counties.

The courtroom is located at Logan Place West (Off of South Airport Drive)
                                             3249 Racquet Club Drive
                                             Traverse City, MI  49684

Click here for a map.

 

 

 

 

 

 What type of bankruptcy proceeding is right for me?

Here is a brief description of each of the different types of bankruptcies:

Chapter 7 - Liquidation
 
    The purpose of a chapter 7 is to allow a person to obtain a fresh start from overwhelming debt. Under chapter 7, a trustee takes possession of non-exempt property assets, converts them to cash and distributes the funds to creditors. After filing for relief, an individual debtor may receive a discharge of debts. A discharge permanently prohibits creditors from attempting to collect those debts listed by the debtor on the bankruptcy schedules. However, some debts are non-dischargable. They include certain taxes, student loans, alimony, and child support to name just a few. A corporate business that files Chapter 7 is not eligible to receive a discharge.

Chapter 11 - Reorganization
 
    The purpose of a chapter 11 bankruptcy is to allow an individual or business a limited amount of time free from creditors collection efforts to restructure its financial obligations so it may continue to operate in a normal fashion under a court approved plan of reorganization. Creditors of a business filing a chapter 11 vote on the repayment plan and the plan must be approved by the court. The advantage of chapter 11 is if a trustee is not appointed, the individual or business maintains control of its property during the bankruptcy and allow time to deal with creditors and to negotiate a plan of repayment. Chapter 11 is normally for corporations and businesses but individuals may also file chapter 11. Chapter 11 is complicated and there may be advantages to filing under a different chapter. An individual should consult with an attorney before making the decision to file chapter 11.

Chapter 12 - Family Farmer Debt Adjustment
 
    The chapter 12 bankruptcy law was created to help family farmers who need to reorganize their debts while keeping their land and farming business. Chapter 12 is meant to assist farmers who have potential to reorganize and to allow them relief from a heavy debt burden, while at the same time allow farmers to pay their creditors what is deemed reasonable under the terms of a court approved repayment plan. The rules of a chapter 12 bankruptcy are modeled closely after those of a chapter 13. A chapter 12 case may only be filed by certain family farmers and businesses. A trustee is appointed, but the farmer usually remains in possession of the farm while formulating a plan.

Chapter 13 - Individual Wage Earner 

    The purpose of a chapter 13 bankruptcy is to allow an individual debtor with a regular income pay back debts using their income and enabling a debtor to keep certain assets. A person who operates a small business as a sole proprietor may also file under this chapter. Under a chapter 13 bankruptcy filing, the debtor must promptly file a repayment plan and obtain the court's approval of the plan. Any creditor may object to the plan. The debtor, along with the appointed trustee, must work out any objections to the plan before the court will approve it. The typical repayment period of a chapter 13 is 3 to 5 years. The debtor makes regular payments to the trustee and the trustee distributes these monies to creditors according to the terms of the plan. After completion of the plan, the debtors debts are discharged (with some exceptions) and the debtor is no longer obligated to pay them.


What assets will I be allowed to keep?

    The Bankruptcy Code provides that certain assets do not become property of the bankruptcy estate, 11 U.S.C. § 541, and that other property may be exempted from the bankruptcy estate, 11 U.S.C. § 522.

    If you file under Chapter 7, excluded or fully exempted property will not be liquidated by the trustee.  Exempt property is protected from all prepetition claims except for secured claims, nondischargeable tax claims, and claims for domestic support obligations. 11 U.S.C. § 522(c).

    If you file under Chapter 13, you will retain possession of assets during the proceeding unless the confirmed plan or order confirming the plan states otherwise. 11 U.S.C. § 1306(b).   Most assets, including property and wages received after the bankruptcy filing, will be deemed a part of the Chapter 13 estate. 11 U.S.C.  § 1306(a)


Will I be able to discharge all my debts?

    The most important goal of an individual filing a bankruptcy petition usually is obtaining a discharge from his or her debts.  A discharge means that the bankruptcy court has declared that certain debts are no longer legal obligations and, therefore, any effort to collect the obligation would be illegal.  You are not prohibited from paying discharged debts. 11 U.S.C.§ 522(f). You may also reaffirm a debt. 11 U.S.C. § 524(c).

    Examples of non-dischargeable debt include the following:

  • most taxes, 11 U.S.C. § 523(a)(1);
  • debts for money obtained by false pretenses, a false representation,or actual fraud;
  • any consumer debt for over $500 for luxury goods or services incurred on or within ninety days prior to the bankruptcy filing; 
  •  cash advances aggregating more than $750 obtained within seventy days prior to the bankruptcy filing, 11 U.S.C. § 523(a)(2)(A), (C)
  • unscheduled debts, 11 U.S.C. § 523(a)(3);
  • debts for domestic support obligations as defined in 11 U.S.C.§ 101(14A), 11 U.S.C. § 523(a)(5);
  •  debts for willful and malicious injury 11 U.S.C. § 523(a)(6);
  •  most fines or penalties payable to the government, 11 U.S.C. § 523(a)(7);
  •  most educational loans, unless excepting the debt from discharge would impose an undue hardship 11 U.S.C. § 523(a)(8)
  • debts for death or personal injury arising from the debtor’s drunk driving of a motor vehicle 11 U.S.C.§ 523(a)(9).

    The following types of debt will be dischargeable under Chapter 13 but not under Chapter 7:

  •  debts resulting from willful and malicious injury to property, 11 U.S.C. § 523(a)(6);
  •  debts incurred to pay taxes, 11 U.S.C. § 523(a)(14)–(14A); and

 amounts owed on property settlements, 11 U.S.C. § 523(a)(15).  

A trustee or creditor or the U.S. trustee may object to the granting of a discharge to the debtor. Additionally, a creditor may object to the dischargeability of his or her particular debt. The objection must be set forth in anadversary complaint filed with the bankruptcy court where the case is pending. See Fed. R. Bankr. P. 7001, 5005, 4007.

 

 

 

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