Category Archives: Bankruptcy

Can Chapter 7 bankruptcy help me get my driver’s license back?

Posted on by
Reply

Question

Some time ago I got fined for a traffic violation. I wasn’t able to pay the fines, and the state took away my driver’s license. I am planning to file for Chapter 7 bankruptcy and hope to discharge the traffic fines. If I do, can I get my driver’s license back?

Answer

If the state took away your driver’s license because you didn’t pay your traffic fines, you can’t discharge (eliminate) those fines in Chapter 7 bankruptcy. But Chapter 7 bankruptcy can help you pay back your traffic fines by eliminating many of your other debts. Read on to learn more about whether Chapter 7 bankruptcy can help you get your driver’s license back.

You Can’t Discharge Traffic Fines in Chapter 7 Bankruptcy

You can’t discharge certain types of obligations in Chapter 7 bankruptcy. Unfortunately, traffic fines are one of those debts. Bankruptcy laws state that a Chapter 7 discharge will not wipe out fines or penalties you owe to a governmental unit.

This means that filing for Chapter 7 bankruptcy will not discharge your outstanding traffic fines. But if you were unable to pay your fines because you had too many other debts, Chapter 7 bankruptcy can help you by wiping out many of your obligations and allowing you to pay the fines and get your driver’s license back (discussed below).

Chapter 7 Bankruptcy May Help You Pay Your Traffic Fines

Just because you can’t discharge your traffic fines in Chapter 7 bankruptcy doesn’t mean that filing a Chapter 7 case will not help you. In many cases, debtors file for Chapter 7 bankruptcy because their income doesn’t allow them to meet all of their monthly financial obligations.

If you could not pay your traffic fines because you didn’t have any money left after paying obligations such as credit cards and medical bills, filing for Chapter 7 bankruptcy can help you eliminate those debts and free up money in your budget. If you will have enough money in your budget to pay the traffic fines after filing for Chapter 7 bankruptcy, it might still be in your best interest to file.

Continue reading →

Here Is Exactly Why People Who File Bankruptcy Are Smart

Posted on by
Reply

Today the biggest financial calamity looming ahead of 50 percent of people is not their immediate debt but the failure to set sights further down the road and look at the retirement crisis to come. Putting off dealing with your debt can cost you the very money you will need to retire and be able to afford to eat and live even just a moderate life. If you want to see what limping along in a failed debt relief strategy will cost you,  It is a legal choice made when the debt situation is hopeless. I am certainly not recommending bankruptcy as a casual solution and I’ve seen very few people who use it that way. In fact the percentage of people who file bankruptcy more than once is very small.

If you’ve decided to move ahead with bankruptcy then here are some good tips shared with me by Rick Abelmann, a bankruptcy attorney in Hawaii.

What Not to Do Before Bankruptcy

Debt can creep up on you. Perhaps you had a credit card that started out with a low interest rate. You have that credit available, so why not buy a couple of things that you wanted for a while, but haven’t been able to afford? Or, perhaps you’re using it to buy something essential. Either way, that interest rate suddenly balloons, or the amount you owe grows larger every month, until you simply cannot keep up.

That is the point when you might want to consider filing for bankruptcy. That’s a scary word these days, but the truth is it is meant to provide some protection, and a way forward, for people who are unable to pay their debts. Speaking with a lawyer or financial planner can be helpful, but if you find yourself in over your head, filing bankruptcy may be your only option.

That are lots of guides, and lots of people, out there that can help you navigate the first few steps in the filing process. However, there are some things that you definitely do not want to do before filing for bankruptcy.

1. Don’t Pay Creditors
Avoid making any large or unusual payments. This can seem counterintuitive, but is an important point. It may seem like you should pay creditors if you are able, but it can cause problems later on. This is not to say you shouldn’t make routine payments or pay bills. You should still pay your monthly credit card bill, if you can, and your electric bill and so forth. However, large payments to single creditors, or paying off a whole debt, can cause problems after you file. These are called ‘preferential transfers,’ meaning that one creditor has benefited unfairly over others. This is particularly true if the debt you pay off is to a relative or friend. These creditors can be sued later by the court, and have the money taken away.

2. Don’t Run Up New Debt
It may be obvious, but it is worth saying. Do not, if you plan on filing for bankruptcy, run up new debt unless it is absolutely necessary. As the saying goes, if you find yourself in deep, the first thing to do is stop digging. The consequences of running up new debt can be serious. The new creditor can claim you took out that loan, opened the credit card, or ran up the balance on an existing card, without intending to pay it back. This can legally be considered fraud, and that debt, in particular, will not be discharged in bankruptcy proceedings. You will still owe the whole of that debt.

3. Don’t Make Any Unusual Transactions
Again, you should continue to pay routine bills. No one will object to you paying for food or other expenses that cannot be avoided. Any transactions beyond the routine should be avoided, again, unless necessary. Some people try to transfer money or assets to relatives or friends in the hope that this will prevent the court from seizing them. This is an incorrect belief, and the court may end up suing for the return of the assets. If you own a business, in whole or in part, do not try to transfer it or remove your name. Do not transfer titles of cars or homes. Definitely do not buy new luxury goods or make unnecessary purchases. All of these things can be classified as fraud, and have unpleasant consequences.

4. Don’t Keep It to Yourself
You may be considering bankruptcy because you are being sued, or because creditors are threatening to sue. If this is the case, do not wait to tell them you are filing, or considering filing. Creditors may attempt to garnish wages or seize assets to discharge a debt, which could be avoided by filing for bankruptcy. Money and assets can be retrieved in some cases after filing, but it is difficult and can be expensive. It is better to avoid the problem by informing creditors of your plans before any of these problems arise.

5. Don’t Provide Inaccurate Information
You are required, in the process of filing for bankruptcy, to provide full and complete information. Any debt, assets, accounts, and other financial information has to be provided. Attempting to hide information can, again, be considered fraud. Fraud is a serious issue, and can prevent debts from being discharged in bankruptcy proceedings. It can also potentially lead to criminal charges.

7. Don’t Drain Retirement Funds
In many cases, you are allowed to retain retirement funds and accounts. Rather than draining these accounts to pay debts, it may be preferable to file for bankruptcy and keep your retirement funds intact. The specifics of which accounts are safe from bankruptcy proceedings and which are not will vary depending on the specifics of the situation and the laws of your particular area. It is usually a good idea to consult with a lawyer before making decisions in regards to retirement funds.

8. Don’t File If You Are About To Receive A Large Sum
Perhaps this is another no-brainer, but you should not file for bankruptcy if you are about to receive a large sum of money that will allow you to pay your debts in all or in part. Bankruptcy can be helpful in many cases, but if you can resolve your financial situation without filing, that is probably preferable. This money may be seized by a court representative and used to pay your debts, also, when you might have been able to reach another arrangement with your creditors.

The primary factor in many of these cases is time. Many jurisdictions have a specific time period, usually 70 to 90 days, before filing, during which you should not make any major changes or transactions. However, it can be dangerous to think you can out maneuver the court and find sneaky ways to retain your assets. Being honest and upfront is the most likely way to reach a positive outcome.

Call Firebaugh & Andrews for your free consultation 734-722-2999

Are the fees I paid my bankruptcy lawyer and trustee tax deductible?

Posted on by
Reply

Basic Information Bankruptcy fees paid to lawyers and trustees can be either a tax deduction or not and it will depend on the type of bankruptcy filed, Chapter 7 or 13, and on the items included in the petition. In order to take any bankruptcy expense as a deductible item on your taxes, you will need to file a Form 1040 and itemize your expenses. If you file using the short form, you will not be allowed to claim any itemized deductions.

Deductions Allowed by IRS
Regular legal expenses for Chapter 7 and 13 bankruptcies and the filing fees, $299 for Chapter 7 and $274 for Chapter 13, are not deductible as defined in IRS Publication 908, the Bankruptcy Tax guide, which rules these fees as personal expenditures. However, if your attorney spends time communicating with the IRS regarding any tax issues you have; those fees are deductible and will be listed as a miscellaneous expense on your Schedule A tax form. Any fees that you pay to either your attorney or an accountant for the preparation of your taxes while you are in a bankruptcy proceeding will be taxable itemized deductions on your Schedule A Tax Form.

Allowable Expenses as Tax Deductions
Any item paid in your plan to a trustee that would normally be a tax deduction, such as back federal or state taxes, spousal support, delinquent mortgage payments or mortgage interest, can still be taken as a personal tax deduction. These are expenses that you are paying through the bankruptcy distribution process by your payment plan administrator, the trustee, and it is the same as if you were writing the check yourself. It is a good practice to ask an accountant or your attorney if you are not sure whether an item is deductible or not.

Continue reading →

Bankruptcy Myths Debunked: Fact vs. Fiction

Posted on by
Reply

When you think of bankruptcy, what words pop into your head? Failure? Broke? Bottom? The end? Humiliation?

Maybe once upon a time, but not so much anymore. While bankruptcy should never be a first choice, in some cases, it may be the only choice. Before you decide whether or not bankruptcy is right for you, we’re debunking the top five bankruptcy myths to bring you the facts.

1. Myth: All bankruptcy options are essentially the same

Fact: Not true. The three you may have heard of — Chapter 7, Chapter 11 and Chapter 13 – are very different. Many individuals file under Chapter 7, which usually allows them to erase most of their debt in a matter of months. Chapter 7 has a higher success rate and is cheaper to file than Chapter 13, which tends to take a lot longer because it requires individuals to use their disposable income to repay a percentage of their debt over a five year period. Whether you qualify for a Chapter 7 or Chapter 13 is dependent on your state’s median income. Then there’s the Chapter 11 bankruptcy, which involves the financial reorganization of a business and can take many years. To know which option is right for you, consult with a bankruptcy attorney. Most consultations are free and can give you a much clearer picture of which option is most realistic for your situation.

2. Myth: If you file, you’ll lose everything you own

Fact: This may be the most common myth, and, unfortunately, it keeps people from filing when it may be the best option for some. Bankruptcy laws vary from state to state, but all states protect certain assets, such as your house, car, retirement plan, household goods and clothing. Bankruptcy should never be the first option for dealing with overwhelming debt, but it may be the best option depending on the individual circumstances. Before deciding on bankruptcy, research and consider all of your options — from hardcore DIY budgeting,  consumer credit counseling, or negotiating a settlement — bankruptcy should be your last option, but it doesn’t mean that it can’t be the right option depending on your financial situation.

3. Myth: You’ll never be able to qualify for a loan again

Fact: Nope. It’s true that filing for bankruptcy will stay on your credit report card for 10 years, but it doesn’t mean you won’t ever be able to borrow or qualify for a loan again. The best way to recover from bankruptcy is jump back into the game and work at gradually rebuilding your credit — start with a secured card and manage it wisely.  You’ll get credit card offers in the mail long before that 10 year mark. They will be from lenders offering cards with very high interest rates. Resist the temptation. Another tip, if you have a credit card with no balance when you file for bankruptcy, you don’t have to list it as a creditor since you owe it no money, and you might be able to keep that card after you file. Because it will cost you a lot more to borrow money after you file, if you’re planning to buy a house or a car anyway, you might want to consider your options before you file. Having said that, don’t max out all your credit cards and then file for bankruptcy. Bankruptcy judges and the trustee assigned to your case will review your purchases before you file and they very well may conclude that your attempt to file for bankruptcy constitutes fraud.

4. If you file for Chapter 7 bankruptcy, all debts are wiped clean

Fact: Dream on! Certain types of debts cannot be erased, including child support, alimony, government-issued student loans, legal settlements you’ve been ordered to pay and debts incurred as the result of fraud. This is a major issue for consumers defaulting on student loan debt and definitely an important fact to consider before opting to file.

5. Myth: If you’re married, both of you must file

Fact: This is true a lot of the time but not always. If the debt is in one spouse’s name, there is no need for both to file. In fact, in that case, they shouldn’t both file. Before you decide, consult with a bankruptcy attorney for the best advice –initial consultations are usually free and worth the time. More often than not, debt is in both their names, so both must file.

Bonus Myth: Only “losers” file for bankruptcy

Fact: Most people who file didn’t do anything risky or reckless that led to their financial mess. They file because fate has dealt them a blow – divorce, loss of a job, identity theft or a serious illness – that wreaked havoc other finances. Most file after months — or even years — of struggling to pay their bills and falling more and more behind. Bankruptcy is not always the answer, but for some it may be the only answer.

Call Firebaugh & Andrews today for your free consultation  734-818-0948

Nine Reasons to File Bankruptcy in the New Year

Posted on by
Reply

Is this the year you’ll get your financial house in order? Here are nine reasons why this may be the year you take stock finally do something about that debt you’ve been struggling to manage.

1.  Eliminate Crippling Credit Card Debt

Are you making the minimum payments on your credit card debts?

Are you missing payments on your credit card debts?

Are you taking cash advances or using your credit cards to pay living expenses like groceries, utilities or even car payments?

Have the credit card companies increased your interest rates?

If any of these is true, it’s time to think about how you’re going to retire that debt. If you’ve looked at how to manage the debt to get it paid off, and that doesn’t seem workable to you, consider filing a bankruptcy case. It may be the only way to eliminate the debt once and for all.

2.  Eliminate Unpaid Medical Debt.

Medical debt is one of the major reasons many people file bankruptcy. It’s often not something one can plan for. Even if you have insurance, the co-pays may be unexpected and more than you can handle. You can attempt to negotiate a reduced payment or set up payments, but if you find it a strain to make those payments, bankruptcy might be a viable alternative for you.

3.  Get Rid of Bill Collectors. 

This is a huge reason people file bankruptcy. They just can’t stand the calls and letters anymore. There are laws designed to protect consumers from unscrupulous collection agents, but those laws are ignored every day.

Even when the bill collectors follow the rules, you still may have too many accounts to manage successfully. Filing bankruptcy will stop the calls and letters.

4.  Stop a Foreclosure, Repossession,  Garnishment, Tax Levy, Eviction, Utility turn off or Lawsuit.

The same way that bankruptcy stops bill collectors from calling and demanding payment, bankruptcy can prevent a foreclosure of your house, repossession of your car or other collateral, a garnishment of your wages or bank account, a taxing authority like the IRS from taking your property, or a lawsuit being filed against you or continued.

It can also help postpone an eviction or prevent immediate turn off of certain utilities, like water, power or gas. The automatic stay usually goes into effect when the case is filed. Except for some limited circumstances, the automatic stay will prevent or stop all these collections actions from going forward.

5.  Include 2015 Taxes in a Chapter 13.

If you owe federal or state taxes for 2015, by waiting until January 1st to file, you should be able to include those taxes in a Chapter 13 case. Such recent taxes cannot be discharged in a Chapter 7 case, but their payment can be managed in a Chapter 13 case so that they are payable over a longer period of time than usual.

6.  Purge Holiday Debt.

It’s not pretty, but we know that some people do charge up debt to make their holidays merrier. You have to be careful with this one, however. If you charged debt intending to include it in a bankruptcy case, that could backfire on you. In addition, there are restrictions on the dischargeability of recent debts for cash advances or luxury purchases. You should consult a qualified bankruptcy attorney, who can help you determine the best timing for a bankruptcy after you’ve charged up debts.

7.  Manage Old Taxes.

Many old tax debts can be discharged in a bankruptcy case. The rules for determining which debts are dischargeable and which are not are tricky. Timing is often an issue because the dischargeability may be based on when and if returns were filed, when the IRS takes certain actions, and subsequent actions by the taxpayer. If you file your case too soon, before relevant dates and deadlines have passed, you could be forever barred from discharging that tax debt in a later bankruptcy case.

8.  Manage Student Loans.

Using bankruptcy to manage student loans can be one of the most helpful reasons to file. Student loans are notoriously difficult to discharge in a bankruptcy case, but filing bankruptcy can help in at least two ways. If you file a Chapter 7 case, you might eliminate other debt, like credit card or medical debt.

You can use those resources to pay student loans. In addition, you may be able to use a Chapter 13 case to force your lender to accept lower payments, at least for the short run.

9.  The Stress is Affecting Your Work or Home Life.

Of course financial issues can cause stress. It strains marriages. It causes excessive worry. It can lead to health issues. It can cause you to miss work or even lose your job. Check out these articles to learn more about managing your emotions during a bankruptcy case

Call Firebaugh & Andrews today for your free consultation 734-722-2999

Can you file Emergency Bankruptcy Filing Without Full Fee ?

Posted on by
Reply

t is possible to file bankruptcy without paying the attorney fee in full. Generally, the attorney fee must be paid in full prior to filing the bankruptcy. This is because any fee owing at the time the bankruptcy is filed is discharged. Sometimes a client needs to file bankruptcy immediately due to an emergency such as a utility shut-off, garnishment or property seizure. In those cases it is possible for the attorney to file a case and bifurcate his services.

Firebaugh & Andrews in this case will provide certain services such as an emergency bankruptcy petition filing for a set fee. The client will then need to sign a second retainer for the attorney to provide additional services such as completion of the schedules and representation at the creditor’s examination. If you are facing an emergency situation which requires the immediate filing of a bankruptcy petition but do not have the full fee required to file the case, this option should be explored.

In filing Ch 13, it is not necessary to pay the attorney fee in full. Often times the attorney can file the case for the filing fee of $331.00 . The Firebaugh & Andrews can provide for the remainder of his fees to be paid through the Ch 13. In such a case the attorney is essentially accepting zero down towards his fee to file the case. This is often helpful for clients who are facing serious financial problems and need quick relief.

Call Firebaugh & Andrews for your free consultation 734-722-2999

Why choose Firebaugh & Andrews for your bankruptcy?

Posted on by
Reply

Get a fresh financial start with Firebaugh & Andrews P.L.L.C Bankruptcy Law Firm
Advice and representation for individuals and businesses through the intricacies of the Bankruptcy process
Filing for bankruptcy can be a very time-consuming and complicated process. As a debtor you must comply with numerous federal laws and regulations and a mistake at any point in this process can be very costly resulting in the court refusing to discharge your liabilities. The consequences of this can have a long-term financial effect and put a high strain on you and your family. With so much at stake it is essential that you make the right choices and trust a professional bankruptcy lawyer right from the start. Whether you are considering filing under Chapter 7, 11 or 13,  Firebaugh and Andrews will be able to guide you through the labyrinth of procedures and requirements, to ensure a fresh financial start with less to worry about and more to enjoy from your future life.

What is Bankruptcy?

If you are a business or an individual who cannot meet your financial obligations in relation to repaying some or all of your debt, bankruptcy could be the way for you to go. Federal law governs the rules and procedures related to bankruptcy in the U.S. so individual states cannot legislate in this area. We will determine whether bankruptcy is the right way for you to seek relief and whether you should do it under Chapter 7, Chapter 13 or Chapter 11 of the United States Bankruptcy Code.
Our Firm
Our head attorneys, Samuel G. Firebaugh and Roberta W. Andrews have over 40 years of experience between them in practicing bankruptcy law as well as additional knowledge in the practice of other areas of law, finance and business. You can rely on their competence, in-depth knowledge and case experience, as well as their high professionalism and rest assured that your circumstances will be treated with the utmost attention and you will receive a friendly, compassionate and personalized service. Our lawyers always put the interests of our clients at heart and make sure that you are given the best advice about the choices you have. Samuel and Roberta will be with you every step of the way, making sure that your case that you get the best possible outcome depending on your individual circumstances.

Get in Touch
There’s no better time to get in touch with Firebaugh & Andrews than today. Call us on 734-722-2999 and re-start your finances for as little as $317.00 down.
You can find us
38545 Ford Rd Ste 104
Westland, MI 48185

Continue reading →

Facing Bankruptcy While Living in Michigan

Posted on by
Reply

Michigan residents who find themselves overwhelmed with debt can seek relief under the federal bankruptcy laws. There are two common forms of bankruptcy for individuals: Under Chapter 7, the courts sell off all non-exempt assets to pay off as much of your debt as possible and under Chapter 13, you keep all or most of your assets but must create a court-approved plan to pay off your debts over time. Although bankruptcy is handled in the federal courts, some of the details vary based on your being a Michigan resident.

District Bankruptcy Courts in Michigan

Michigan’s bankruptcy court is divided into the Eastern District, with the main court in Detroit, and the Western District, with the main court in Grand Rapids. Each district also has divisional offices where you may file so long as you file in the district where you live.

Can I File Chapter 7 Bankruptcy?

You may file Chapter 7 bankruptcy if your average monthly income for the six months before you file is less than Michigan’s median income for a family of your size. For example, if you are married with two children, you must earn less than Michigan’s median income for a family of four, which is $6,037 monthly for 2012. If you make more than this, you must pass a stringent means test to qualify for Chapter 7.

How Long Is a Chapter 13 Repayment Plan?

The amount of time you must spend paying your creditors also depends on your income as compared to Michigan’s median income. For example, if you make less than the median income, your repayment plan will usually be up to three years. If your income matches or exceeds the state median, your plan will be five years, unless you’re able to pay off all unsecured debt in less time.

student

Continue reading →

Know Chapter 7 Bankruptcy

Posted on by
Reply

Know Chapter 7 of Bankruptcy
Chapter 7 is the most common type of bankruptcy files that are filed against a person. In fact this particular chapter deals mostly with liquidation of private properties. Unlike other chapter like Chapter eleven and chapter thirteen which mostly deals with reorganization of such properties, chapter seven has fixed guidelines regarding how processes should work under it. In fact a Westland Michigan Bankruptcy Lawyer is the best person to approach who can give you more details about the various clauses of this chapter. In fact when a person wants to file a bankruptcy case against anyone, one must be aware of all the clauses under each chapter so that one can take the right decisions of filing a case against somebody.
There are specialized Westland Michigan Chapter 7 Bankruptcy Attorney who deal specially with the clauses and the types of bankruptcy cases under chapter seven. These are the people whom one should approach to be able to get an in depth understanding for their cases and the clauses under this chapter. In fact it is always advisable to take professional help even if it charges a little extra to be able to get the legal part right for any type of case.  Call Firebaugh and Andrews today to get your free consultation. 734-722-2999

What Is A Bankruptcy Firm?

Posted on by
Reply

Filing for bankruptcy is a scary and challenging thing. There are many laws that you must follow exactly in order to correctly file your bankruptcy, not to mention understanding each of the separate types of bankruptcy you can file. For someone that does not have any experience with filing legal documents it can be daunting to file these types of paper work. If these bankruptcy papers are not filed correctly, it can end up being a bigger problem then the one that led to the need for a bankruptcy to begin with.

If time is of the essence it maybe better for you to find an attorney that specializes in bankruptcy. A bankruptcy firm could be the easiest place to start; because they are all lawyers that have specialized in bankruptcy law and all work in the same building together. The simplest explanation of this is a law firm where all of the lawyers have specialized in bankruptcy law.

Continue reading →