Bankruptcy will stop:

• home foreclosure
• vehicle repossession
• property seizure
• creditor harassment and lawsuits
• utility shut-off
• wage garnishment

Bankruptcy will not discharge:

• taxes
• student loans
• domestic support obligations
• liens against homes and cars by secured creditors

Bankruptcy basics:

Chapter 7: This is individual liquidation bankruptcy wherein an individual’s unsecured debt can be legally discharged.

Chapter 13: This is individual reorganization bankruptcy. It allows for the individual to develop a plan for repayment of debts over a period of three to five years.

Chapter 11: A company chooses this form of reorganization bankruptcy so the court can supervise the reorganization of the company’s debts and contractual obligations while the company stays in business.

Bankruptcy and Your Credit Score

Our society tracks its citizens numerically. One of the most important financial numbers in your life is your three-digit credit score.

Your credit score can affect where you live, where you work, and other basic life details. A high score can lead to lower car and home insurance premiums, eliminate the need for a utility company deposit, and can help you secure new employment. Difficulties in these areas, as well as the burden of large amounts of unsecured debt, indicate that you should analyze your credit score.

The purpose of the credit score (aka your FICO score) is to rate your risk for assuming debt based on your credit history. This is calculated based on payment history, current amount owed to creditors, length of credit history, type of credit mix, and number of new credit applications.

There are three major U.S. credit-reporting bureaus – Equifax, Experian, and TransUnion. They assign a score from 300 to 850, and each bureau may assign a different score.

A low credit score alone does not qualify you for bankruptcy relief, but it is an important consideration. A complete analysis of income, expenses and liabilities is required for anyone thinking about Chapter 7. Often, a low score is the first indicator that action should be taken to resolve debt problems.

In particular, old liabilities that go unpaid – whether from several-years-ago debt or debts that have been transferred to collections – result in low credit scores. We recommend that you obtain a complete current credit report. You can get a free report from only one reporting bureau, or obtain a report from all three bureaus for $50 (married couples) or $30 (singles).

A successful Chapter 7 discharge can be used to correct misinformation on the credit report. When debt has been discharged in a formal Ch. 7 proceeding, the credit bureaus must remove the debt from the report. The end result is a higher credit score and a better financial life. Please contact PMA if you would like to obtain a credit report or for more information about the Chapter 7 process.

Debtor’s Responsibilities

Under the current Bankruptcy Code, it is the Debtor’s responsibility to report all liabilities to his or her attorney and to the Bankruptcy Court. Debtors cannot pick and choose which assets and liabilities to list and which ones the leave out: they must all be included. Tracking down every single debt, account number, and current address of all creditors can be a difficult task – but necessary. You may be denied a discharge if your financial records are inadequate or if you fail to cooperate with the Trustee.

There are also a number of time-sensitive filings and hearings that our bankruptcy attorney or bankruptcy paralegal will stay on top of, but you must cooperate with the timetable determined by the Bankruptcy Code and the Trustee, and appear at all hearings when requested by your attorney.

If you feel you are under a mountain of debt and you need a fresh start, as well as the breathing room the automatic stay provides you, please call 616-458-3994 to get started.

Our Bankruptcy Team:

Miles J. Murphy, III, Attorney, with more than 20 years of experience in Commercial Law and Civil Litigation.

Ryan M. Huizenga, Attorney, who specializes in Business Transactions, Business Law and Civil Litigation.

Amanda DeChamplain, Paralegal, with more than 10 years of experience in shepherding Bankruptcy petitions through the system.

John L. Rzepka, Tax Resolution Specialist, with more than 30 years of experience, including 15 years with the IRS.