Detroit, Michigan Bankruptcy FAQs
Filing for bankruptcy in Detroit, Michigan, can feel overwhelming, but Noble Path Legal is here to guide you through every step with answers to bankruptcy questions here in our Bankruptcy FAQ. Below, we answer common questions about bankruptcy in Michigan to help you make informed decisions.
1. What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” allows you to discharge most debts, freeing you from legal obligations to repay them. While some debts (like child support and certain taxes) are non-dischargeable, Chapter 7 offers a fresh financial start if you meet income eligibility requirements. Personal assets are rarely liquidated due to exemptions protecting essential property. Learn more about Chapter 7 bankruptcy here.
2. When Will My Creditors Stop Harassing Me?
The moment your bankruptcy petition is filed, creditors are legally required to stop all collection activities, including phone calls, letters, lawsuits, garnishments, and foreclosures. This immediate relief is enforced by the Federal Bankruptcy Court, bringing you peace of mind.
3. Do I Have to Take a Credit Counseling Course?
Yes. Bankruptcy law requires two credit counseling courses: one before filing your petition and another after. Both are conveniently available online or by phone.
4. Will My Bankruptcy Affect My Spouse?
If you file alone, your bankruptcy will not affect your spouse’s credit or assets. Bankruptcy is linked to your Social Security Number and applies only to your debts. However, joint debts remain the responsibility of the non-filing spouse.
5. Can I Keep My Credit Cards After Filing?
By law, all debts, including credit cards, must be included in your bankruptcy filing. If a credit card has a zero balance, it is not listed as a debt but may still be closed by the issuer. After discharge, you’ll likely receive offers for new credit cards, though caution is advised due to high-interest rates.
6. How Much of My Property Can I Keep?
Most people filing Chapter 7 bankruptcy in Michigan keep all their property, thanks to exemptions protecting personal assets like vehicles, clothing, and household goods. If you’re concerned about specific assets, Noble Path Legal will provide a clear assessment during your free consultation.
7. Can I File for Bankruptcy Again?
If you previously filed Chapter 7, you can file again eight years and one day after your prior filing date.
8. Can I Be Fired for Filing Bankruptcy?
No. Federal law protects employees from termination due to a bankruptcy filing.
9. Will Bankruptcy Affect My Ability to Get Student Loans?
No. Federal law prohibits discrimination against bankruptcy filers when applying for student loans.
10. How Much Does Filing for Bankruptcy Cost?
Costs vary depending on your case. For Chapter 7 bankruptcy, Noble Path Legal charges an affordable flat fee. For Chapter 13 bankruptcy, we charge a small retainer fee up-front, prior to filing, and the balance of the fees are generally paid through the Chapter 13 Plan itself, out the Chapter 13 Plan payments that you remit to the Chapter 13 Trustee. (Read more about Chapter 13 bankruptcy and how it works here.) In both cases, the Bankruptcy Court also charges filing-fees.
11. Can I Discharge a Judgment in Bankruptcy?
Yes, collections judgments for most debts can be discharged, preventing future collection. However, some judgments, like those involving fraud or domestic support obligations, are non-dischargeable. If you’re facing a lawsuit, contact us immediately to explore filing before a judgment is issued.
12. Are Utility Bills Dischargeable?
Yes, past-due utility bills can be discharged. To continue service, you may need to open a new account and provide a deposit.
13. Do I Have to Be an American Citizen to File?
No. Anyone with debts or property in the U.S. can file bankruptcy, including American citizens living abroad.
14. Are Property Taxes Dischargeable?
Property taxes are generally non-dischargeable, but they “run with the land” in Michigan, meaning the property’s new owner becomes responsible. If you retain your property, past-due taxes must be repaid through a Chapter 13 payment plan or directly after Chapter 7.
15. Are Student Loans Dischargeable?
Discharging student loans requires proving “undue hardship” in a separate legal process. This standard is difficult to meet but not impossible. Contact us to discuss whether you may qualify.
16. Will I Lose My Retirement Savings?
Retirement accounts, including 401(k)s, IRAs, and 403(b)s, are fully protected in bankruptcy. Certain rollover IRAs may require closer analysis, which we can address during your consultation.
17. Will Everyone Know I Filed for Bankruptcy?
Bankruptcy filings are public records, but discovering them requires specific searches on legal databases. Unless you share your filing, it’s unlikely anyone will find out.
18. How Does Bankruptcy Impact My Business?
In Chapter 7, your ownership interest in a business is considered an asset, potentially subject to liquidation. However, incorporated businesses or LLCs are separate entities and not directly affected. In Chapter 13, no business assets are liquidated, but operations may face scrutiny. Schedule a consultation for personalized advice.
19. Do I Need a Lawyer to File Bankruptcy?
While not legally required, hiring an experienced Livonia bankruptcy attorney ensures a smoother process and protects your assets. Bankruptcy law is complex, and mistakes can be costly. At Noble Path Legal, we offer the expertise to navigate even the most challenging cases.
We hope that our Detroit Bankruptcy FAQ has been helpful. However, the decision to file a Chapter 7 or Chapter 13 bankruptcy is highly personal. The right answer for YOU will depend upon the particulars of your specific circumstances.
For personalized guidance on filing bankruptcy in Detroit, Michigan, contact Noble Path Legal today for a free initial consultation by clicking the button below.
Let us help you take the first step toward financial freedom.
