Statistics reveal that in 2017 more than 700,000 individuals filed for bankruptcy. Unfortunately, bankruptcy can remain on your credit report for up to 10 years, depending on the type of bankruptcy you file.

Sign up for a Secured Credit Card

After your bankruptcy is discharged, take out a secured credit card, if possible one that does not require an annual fee. With a secured credit card, you must provide a deposit and your credit limit will then be assigned based on the amount deposited. During the first year that you declare bankruptcy, make certain to place at least one charge a month on your card and make sure this charge is not more than 20% of your available credit.

Sign Up for a Credit Monitoring Service

After declaring bankruptcy, enroll in a free credit reporting service like CreditKarma. With these services, you can monitor your credit report to make certain that you do not end up the victim of identity theft. Many people discover that after their credit score reaches 700, they begin to receive mainstream offers from major credit institutions. After obtaining a standard credit card, you should make sure to keep your finances in order and still avoid irresponsible credit behavior.

Learn Your Lesson From Filing for Bankruptcy

To avoid having to declare bankruptcy in the future, it is important to understand why you declared bankruptcy in the first place and to avoid these mistakes in the future. For some individuals, bankruptcy was the result of unexpected events like the sudden loss of a job or steep medical bills. For other people, overspending or financially risk behavior is the cause of credit problems. Responsible behavior is often promptly rewarded with a good credit score that helps you continue to build a good financial future and obtain lower insurance premiums.

Speak with an Experienced Bankruptcy Lawyer Today

The bankruptcy process is particularly complicated and it is natural to have a ton of questions. One of the best ways to make certain that your bankruptcy process resolves in the best possible manner is to obtain the assistance of an experienced bankruptcy attorney. Contact Resnick Law today to schedule an initial free consultation.

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Many people who have a difficult time paying their bills have discovered that bankruptcy is an invaluable option. When financial indebtedness involves student loans, however, many people are deterred because they have heard that student loans are not capable of being discharged in bankruptcy. While it is true that there are steep requirements for discharging student loan debt through bankruptcy, some people have managed to do it. For this reason, bankruptcy is worth considering even if you have significant student loan debt, provided that you have the assistance of an experienced bankruptcy attorney.

The Hardship Requirement

In 2005, Congress enacted the Bankruptcy Abuse Protection and Consumer Protection Act, which made federal and student loans more challenging to discharge in bankruptcy. In most situations, a person is unable to discharge debt if the borrower is unable to establish that the loans led to undue hardship. To establish that an undue hardship exist, debtors must establish that:

• They are unable to maintain a minimal standard of living for themselves as well as their dependents due to their current income and expenses
• Their financial situation is not likely to change during the term of the loan
• They have made good faith efforts to repay their loans

This hardship requirement only applies to federal student loans, student loans funded by a non-profit, and qualified educational loans. The debtor must have attended a Title IV certified school, borrowed only as much as the school’s cost of attendance, and have been a qualified student, which often means having at least a half-time course load.

Income Driven Repayment Plans

While some student loans, including Perkins loans, are federal loans, other loans are non-federal and made through private lenders. There is an option of income-driven repayment for federal student loans, which involves borrowers making loan payments based on their monthly income and family size. Often, after faithfully paying income-driven repayment plans for a period of several decades, a person is able to discharge the remaining loan balance. Because non-private student loans do not offer income-driven repayment plans, individuals are not able to lower monthly payments for an extended period, which means that it is often easier to show that these loans are creating an undue hardship.

Prepare a Budget

If you decide to pursue bankruptcy options for student loans, it is critical to prepare a budget that details your expenses as well as paying work. It is important that not just large loans, but also small ones will likely be analyzed by a bankruptcy court. Courts might also analyze if you looked for additional work and whether you will be able to afford student loan payments in the future. Fortunately, an experienced bankruptcy attorney can help prepare you for these situations.

Obtain the Services of a Knowledgeable Bankruptcy Lawyer

If you are interested in navigating the bankruptcy process, you should not hesitate to speak with a knowledgeable bankruptcy attorney. Resnick Law has helped many people navigate bankruptcy. We understand the complexities of bankruptcy law and will remain committed to obtaining the results you deserve. Contact our law office today and during a free consultation, we will discuss your various available options to obtain compensation.

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One of the most common myths about bankruptcy is that you are required to give away all of your belongings. In reality, there are certain exemptions and items that you are allowed to keep during bankruptcy. For example, Michigan has a distinct group of items that a person is allowed to keep while navigating the bankruptcy process. To determine what items you are allowed to keep when filing for bankruptcy as well as answer the many questions that arise about the bankruptcy process, many people find it helpful to obtain the assistance of a seasoned bankruptcy lawyer. It is also helpful to understand some of the basics about Michigan’s homestead exemption.

The Amount Allowed Under Michigan’s Homestead Exemption

In accordance with the Michigan exemption law, homeowners as well as dependents are allowed to exempt up to $38,225 of interest in property. In cases in which the homeowner is 65 years of age or older (or the homeowner is disabled), the amount is increased to $57,350. While some states recognize that couples who file for bankruptcy and own property together are able to use the full exemption amount, married couples in Michigan who own property together are unable to double the homestead exemption. Despite these limitations, since 2005, the Michigan Department of Treasury has adjusted the exemption amount every few years. Currently, these amounts are scheduled to be adjusted against in 2020. This homestead exemption will apply to various types of real property that you might own in Michigan including houses, condominiums, co-op units, mobile homes, water vehicles, or any other type of home you own and use as your principal residence. If the property has associated land, the homestead exemptions also includes 40 acres. If the property is located in a city, the exemption includes one lot.

The Option of Federal Bankruptcy Exemptions

In the state of Michigan, when you declare bankruptcy, you have the option to select either state or federal bankruptcy exemptions. Currently, the federal bankruptcy exemption is $23,750.  Much like Michigan’s bankruptcy exemption, this federal exemption can be used for houses, condominiums, co-op units, mobile homes, water vehicles, or any other type of home. Unlike Michigan’s exemption, under the federal exemption, married couples are able to double this exemption. Much like Michigan’s exemption numbers, though, these numbers change frequently, which is why it is often important to contact a knowledgeable bankruptcy attorney before proceeding through the bankruptcy process.

Contact an Experienced Bankruptcy Attorney

The bankruptcy process is particularly complex and if you are not familiar with bankruptcy laws in Michigan, it is often in your best interest to obtain the assistance of a skilled bankruptcy attorney. At Resnick Law, we have years of experience in helping individuals navigate the bankruptcy process. Contact our law office today to schedule an initial free consultation.

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There are a number of myths out there about the bankruptcy process. While some of these myths contain an element of truth, most have no basis in reality and were likely created to scare people. If you are navigating the bankruptcy process, it is a wise idea to contact an experienced bankruptcy attorney who can help you navigate this complicated legal world and help you distinguish myth from reality.

Myth #1: You Will Lose All Your Property Through Bankruptcy

In reality, many people who file for bankruptcy do not lose any of their property unless they choose to surrender items. As part of Chapter 7 bankruptcy, you have the option to keep property like your home and car while you continue to make monthly payments. If you are unable to qualify for Chapter 7 bankruptcy, you can still file for Chapter 13 bankruptcy, which will allow you to retain your property.

Myth #2: Your Spouse Must Also File for Bankruptcy

Spouses may file for bankruptcy jointly, but spouses can also file separately if the other spouse does not want to pursue bankruptcy. The origin of this myth is likely the fear that both spouses’ credit will be ruined if only one spouse files for bankruptcy. Simply not the case.

Myth #3: Tax Debt can Not be Discharged in Bankruptcy

While it is true that tax debts are often non-dischargeable, in some situations, they are. To determine if your tax debts are capable of being discharged in bankruptcy, ask a seasoned bankruptcy lawyer who can evaluate your particular situation.

Myth #4: You can Not Rebuild Your Credit After Bankruptcy

After declaring bankruptcy, you often must wait some time to rebuild your credit. In many cases, however, people who navigate the bankruptcy process discover that they are sent credit card applications shortly thereafter. In many cases, individuals who have learned how to handle their credit wisely are able to quickly rebuild their credit score.

Myth #5: Everyone Will Know About Your Bankruptcy

It is true that bankruptcy filings are a matter of public record. To find your bankruptcy, however, a person would need to know how to search for your particular bankruptcy filing and pay a fee to use the court’s filing program. Bankruptcies, however, are not published in newspapers, so your co-workers, employers, and friends often will not know that you filed for bankruptcy.

Contact an Experienced Bankruptcy Attorney Today

While it is possible to navigate the bankruptcy process on your own, if you make one mistake, there is a possibility that you will end up with all your original debt. For this reason, it is a wise idea to obtain the assistance of an experienced Michigan bankruptcy lawyer to help you navigate the bankruptcy process. Contact Resnick Law today to schedule an initial free consultation.

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Because filing for bankruptcy is often seen as an acknowledgement of financial failure, many people resist initiating the bankruptcy process. In reality, waiting to file bankruptcy often makes it more difficult for a person to recover from the bankruptcy process. The following will review some of the reasons why you should not delay in speaking with an experienced bankruptcy lawyer.

How Waiting to File can Cause Problems

There are some practical reasons why individuals who are interested in bankruptcy should not delay the process. The longer that a person waits to file bankruptcy, the more likely an individual is to encounter one of several obstacles, which include:

• The longer that a person waits, the more likely that a person is to experience a reduction of his or her assets. With a decreased number of assets, it will be more difficult to rebuild one’s credit rating after declaring bankruptcy.
• The debt-to-income ratio is often increased for individuals who wait to file bankruptcy. As a result, by waiting to declare bankruptcy, you will likely end up facing more and larger debts that require discharge.
• Individuals who wait to file bankruptcy are more likely to end up facing debt collection lawsuits. This can creat additional complications associated with rebuilding your credit history.

Because of these numerous complications, individuals who wait to file bankruptcy often experience a more challenging time obtaining a fresh start at rebuilding their credit.

Signs You Should File for Bankruptcy

One of the most challenging parts about beginning the bankruptcy process is that it can be difficult to determine if you an appropriate candidate for bankruptcy. Some of the signs that you should consider filing for bankruptcy include:

• You have debts that are greater than 40% of your income. A debt to income ratio of this degree suggests that you will likely experience financial distress and that your debts are too high to pay off without help.
• Credit is being used to pay to pay off other debts. This financial pattern suggests that a person is falling further into debt. It can be particularly difficult to recover from such financial difficulty.
• You have debts that can be erased by declaring bankruptcy. This includes debts related to unsecured credit cards, medical bills, and personal loans. Some other types of debts, including student loans, can only be discharged through bankruptcy in a limited number of situations.
• You have been forced to give up essentials to pay off debts. This might include forgoing medical care or food.

Speak with an Experienced Bankruptcy Lawyer

Once you decide that bankruptcy is an appropriate step, you should then determine whether to file Chapter 7 or Chapter 13 bankruptcy. You should not hesitate to contact an experienced bankruptcy lawyer at Resnick Law if you are considering pursuing the bankruptcy process. We have helped many people regain their financial footing, and we know what it takes to make sure that you have the opportunity to rebuild your credit.

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While most couples do file bankruptcy together, there are some circumstances in which married couples might decide to file bankruptcy separately. In rare cases, such as newlyweds, for example, one spouse might file bankruptcy alone, which helps to preserve the non-filing spouse’s credit standing. However, certain aspects of the marriage will still be examined, so you should consult with an experienced

The “Means Test”

Even if only one spouse is filing bankruptcy, the entire income of the household must be calculated for the “means test” that determines whether or not you are eligible for Chapter 13 or if you should file for Chapter 7. While bankruptcy laws require that the household’s total income be calculated, the codes also allow for household members who are not filing to include their expenses for deductions, as well. The means test for bankruptcy is quite complicated.

Do You Have to be Legally Married?

The short answer is, yes. You cannot be in a common law marriage, and even if you have been living together and referring to each other as wife and husband for 20 years, you can only file a joint bankruptcy if you are legally married. Common law marriages are not recognized in Michigan, but even if they were, federal bankruptcy codes require a legal marriage for joint bankruptcy petitions.

Will Filing an Individual Bankruptcy Affect Your Spouse?

There are times when only one of the spouses carries the load of debt. Married individuals have the choice of filing bankruptcy jointly or individually, so if only one spouse has the majority of debt, it would make sense for only that spouse to file bankruptcy. If only one spouse files bankruptcy, only his or her personal information, such as a name and social security number, will show up on the petition, so the credit report of the non-filing spouse will not contain any mention of the bankruptcy. This is typically rare, however, in married couples.

Are There Benefits for Married Couples Filing Bankruptcy?

It costs a little over $300 for an individual to file either Chapter 7 or Chapter 13 bankruptcy. Married couples only need to pay this filing fee once, which essentially means that both people get to file bankruptcy for all of their debts for one fee, rather than two. This is typically true for legal fees, as well – married couples’ debts are consolidated into one case.

Are You Considering Filing Bankruptcy?

If you live in Michigan, are married, and you are considering filing Chapter 13 or Chapter 7 bankruptcy, you should contact a Michigan bankruptcy attorney who focuses on helping married couples and individuals deal with their consumer debts. Contact an experienced attorney at Resnick Law P.C.for a free phone consultation at (248) 642-5400. If you are in the Detroit area, you can call (313) 423-8320, and if you are in the Bloomfield Hills, call (248) 642-5400. We will evaluate your specific case meticulously and help you make informed decisions based on your unique financial circumstances.    

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Today the idea of doing it yourself has infiltrated all aspects of our lives. Not only are we advised to tackle home repairs without the assistance of a specialist, we are encouraged to handle legal matters on our own, as well. While it is possible to file the forms associated with certain legal issues with little or no assistance, that does not always mean you should do so. Certain matters such as bankruptcy can quickly become complicated, and without a lawyer to represent you it is easy to

No Representation at Hearings

Once the creation of new filing forms made it easier for a person to initiate bankruptcy proceedings without an attorney, many people rushed to complete bankruptcy petitions on their own. What many forgot or did not realize is that bankruptcy requires a debtor to attend many hearings. Without a bankruptcy attorney, you have no one to represent you during your meeting with your creditors or when your case goes before a judge. In fact, while many debtors are able to skip hearings after the meeting with creditors because their attorneys can attend on their behalf, you will be required to go to all hearings alone, often placing you in a room filled with experienced attorneys.

Errors Lead to Dismissal

Filing a bankruptcy petition and receiving an automatic stay does not mean that you will have indefinite protection from the court. If you make an error in your filing such as forgetting to submit an affidavit or not providing documentation to your trustee or the court, your bankruptcy case could be dismissed. While it is possible to refile, once your case is dismissed, your creditors can resume collection activities and may be even more aggressive than before. Having your bankruptcy case dismissed also means that you will need to repay filing fees and other expenses at a time when money is in short supply.

In many cases, a qualified bankruptcy attorney can take over your case and correct any mistake that you have made. Unfortunately, there are times when a person’s errors are so extreme that a bankruptcy attorney cannot provide that person with the help he or she needs. If your bankruptcy judge dismissed your case with prejudice and bars you from re-filing for several months, an attorney might not be able to get the court to reconsider their decision.

Discuss Your Situation

No matter what your bankruptcy status or financial situation is, the bankruptcy attorneys at Resnick Law are here to help. Our attorneys have helped individuals and businesses throughout Southeast Michigan get relief from their creditors through bankruptcy. We can also help you explore alternative debt relief methods such as debt settlements and negotiations with your creditor. If you are currently struggling with debt, contact our firm today at (248) 642-5400 to discuss your options and get the help that you need.

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A person who is drowning in debt may make the mistake of ignoring his or her creditors. A common misconception is that ignoring a debt will make it go away or help it become more manageable. In reality, pretending a debt does not exist only makes creditors more aggressive, and when it becomes clear that you will not pay them voluntarily, they will begin exploring other methods to extract money from you. One way a creditor may obtain money owed is by getting a

What is a Garnishment?

Garnishment refers to garnishing, or collecting money on behalf of a plaintiff, from the funds of another person. Typically the plaintiff is someone who is owed money by a defendant, and garnishments can be used by major companies, law firms, or even average individuals. The garnishment allows your creditors to obtain the money you owe them through means outside of the collection actions with which most are familiar.

The Garnishment Process and How it Affects You

Once you have fallen significantly behind in payments for a debt, your creditor may take you to court to try and collect their funds.  This method is often used when the debt is unsecured since they have no property such as a vehicle or home to repossess. If the court agrees that the defendant (debtor) needs to pay the debt, then the creditor receives a judgement.  

After the judgement is received a creditor may request a post-judgment garnishment order. The process and secondary order affect you by allowing your creditor to send the garnishment order directly to any person who holds your money or property. As soon as your creditor has a garnishment order, they can contact your employer or bank to have money withheld from your paycheck or withdrawn from your bank accounts.

How to Stop a Garnishment

Finding out that you have a garnishment can be financially devastating, but it is not the end of the world. It is possible to object to the garnishment in writing and make outside arrangements to pay the debt, allowing the garnishment order to be canceled. However, this method is time-sensitive and may not always work. If a creditor has failed to get you to honor other arrangements or the court itself does not agree with the plan, then the garnishment order may remain active. Alternatively, filing for bankruptcy stops all collection activities including garnishments under the automatic stay giving you an opportunity to find a way to recover financially.  

Contact an Attorney

If you have been taken to court or fear that you may have your bank account or income source garnished, then it is important to reach out to an attorney as soon as possible. Timely advice may help you avoid being forced to file for bankruptcy and could save you significant financial hardship. The garnishment attorneys at Resnick Law have experience helping people in situations just like yours. We work with you to make sure that the best choices are made and are available to answer any questions that you may have. Call us today at 248-642-5400 to schedule a free consultation so that we can begin providing you with the legal assistance that you need.

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Chapter 13 bankruptcy allows a debtor to benefit from protection against aggressive forms of debt collection such as foreclosure, repossession, and wage garnishment, while requiring him or her to repay a portion of his or her debt. The repayment amount is based on the financial assets available to the debtor along with the amount of secured and unsecured debts owed. When filing for bankruptcy relief, a monthly repayment amount is proposed and the bankruptcy trustee will decide whether that amount is appropriate or not. However, it is possible that over the course of the three to five-year repayment period, the amount will change. Knowing why a

A Secured Debt is Paid Off

The chapter 13 repayment amount is largely influenced by the debts you have and the income you receive. Major changes to either factor could cause your payment to increase. If you own a home or a vehicle, paying it off means that you have more disposable income each month.  At that point, the bankruptcy court may decide to increase your monthly payment obligation to complete your plan faster or pay off other creditors in your plan.

Additional Income is Received

Changing jobs is one of the most common reasons for a bankruptcy plan payment increase.  Moving on to a higher-paying career or position usually means that the debtor’s income increases. Along with raises or promotions to higher paying jobs, the court may also view consistent overtime as a source of additional income. Any income increase that appears to be reccurring or consistent could lead to an increase in bankruptcy payments.

Support Payments End

Monthly support payments such as alimony and child support are taken into consideration when your debt-to-income ratio is determined. Depending on the age of your children or the time-frame outlined in your divorce decree, your period of making payments could end before your bankruptcy is discharged. When your monthly support obligations end, your trustee will determine a new repayment amount based on the increase of disposable income you now have.

Missed Payments

Falling behind on your monthly chapter 13 payment could extend the life of your repayment term. Usually when this occurs, your trustee will file a motion to dismiss your case or have it converted to chapter 7. Instead of losing your bankruptcy protection or being forced to convert to a chapter that does not allow you to retain certain property, your attorney may be able to have your case reinstated by bringing the plan current. Either a lump sum to catch up on past due payments is required or your monthly payment is recalculated to include the past due amount.

Contact a Bankruptcy Attorney

If you are considering filing chapter 13 bankruptcy or having issues with an existing case, do not hesitate to reach out to a qualified bankruptcy attorney. The legal team at Resnick Law is here to answer your questions and provide you with the help you deserve. The decision to file bankruptcy is not one to make lightly, and we are dedicated to providing you with the high quality legal representation you need. Contact either of our two conveniently located offices today to schedule an initial consultation.

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There are many consumers who look forward to getting substantial tax refunds each year. These funds may be used as savings, to pay for various expenses, or to pay off existing debt. Consumers who have made plans to spend their tax refunds may be concerned about the ability of existing creditors to garnish those tax refunds.

Generally, private creditors – creditors who are not government creditors – cannot garnish a person’s federal tax refund. Federal tax refund garnishment is usually restricted to garnishment by government agencies that are owed money by the taxpayer. In Michigan, however, a private creditor can have a state tax refund garnished by first petitioning a court for a judgement.

With a judgement in hand, the private creditor can seek a writ of garnishment from the Michigan Department of Treasury to intercept a debtor’s tax refund. The writ can apply to garnish or intercept a debtor’s refund once to settle a debt owed to the judgment creditor. There is a fee for garnishment, and the creditor can make one payment when filing for several garnishments.

When a creditor has initiated a garnishment with the Michigan Department of Treasury, the debtor who owes the debt, and the court that permitted the garnishment, are notified of the impending garnishment. If the debtor does not wish to have his or her tax refund intercepted, he can make arrangements to pay the debt in advance and avoid the garnishment.

The debtor may try to avoid losing the tax refund by negotiating with the creditor to set up a payment plan to pay off the debt gradually instead of all at once. Once the creditor has already received a final judgment on the debt, and has taken steps to start garnishment, the creditor may not be willing to negotiate with the debtor. If the debtor has not been successful in keeping to a payment plan in the past, he is not likely to keep up with a plan unless the debtor’s financial circumstances have changed. The creditor has to consider issues such as how much of a refund a particular debtor may receive in deciding whether or not to allow the debtor to pay off the debt in installments.

In addition to seeking to garnish a debtor’s tax refund, a creditor can seek garnishment of a person’s wages as well as lottery winnings. Creditors can also choose to sell a debt that is considered uncollectible to a collections agency or firm, often for pennies on the dollar. If the debtor has filed for bankruptcy before the creditor has been fully repaid, the creditor may still have an opportunity to collect on the debt if the debt is recorded and secured.

Contact an Experienced Creditor’s Attorney

For more information on how you can best collect a debt with minimal costs to your organization and how to deal with debtor bankruptcy, you need to consult an experienced creditor’s rights attorney. Contact us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan to schedule a consultation.

(image courtesy of Sharon McCutcheon)