Your Dedicated Bankruptcy Attorney
If you are considering filing for bankruptcy, our Warren, MI bankruptcy lawyer can help you understand your options and guide you to the best choice for your unique situation. Our attorneys have experience assisting consumers with Chapter 7, 11, and 13 bankruptcy. Our knowledge can help you make an informed decision when deciding if bankruptcy is the right step for you to take and, if so, which type of bankruptcy makes the most sense for your financial situation.
With over 100 years of combined experience assisting clients across the Southeast Michigan community, our attorneys are well-equipped to assist you with your case. We pride ourselves on providing dedicated, personalized, and compassionate service to members of our Michigan community as we strive to help them protect their financial health and understand the options that are in front of them. To schedule your no-obligation consultation with one of our attorneys, contact our team at Gudeman & Associates, P.C. today.
Understanding Bankruptcy
When determining if you should file for bankruptcy, it is important to take the time to understand the various types of consumer bankruptcy and which one might be the right one for you. Our Warren bankruptcy attorney can provide counsel on the nuances of Chapter 7, 11, and 13 bankruptcy so that you can make an informed decision about your financial future.
Chapter 7 bankruptcy is also known as “liquidation bankruptcy,” and is a form of bankruptcy meant for those who cannot repay their debt to creditors. If you are struggling with credit card debt, medical debt, or some other form of debt and are hoping to eliminate your debt quickly, Chapter 7 may be right for you. Filing for Chapter 7 does require a means test, but if you are eligible it can be a good option to prevent foreclosure or repossession.
Chapter 11 bankruptcy is used by businesses to restructure debts and assets. This type of bankruptcy is available to individuals as well, but is often utilized by businesses to continue operations while restructuring their finances and determining a payment plan.
Chapter 13 bankruptcy is a form of “reorganization” bankruptcy that leads to the repayment of debts through a payment plan. If you have enough stable income to manage a three to five year repayment plan, this type of bankruptcy is a viable option to protect your assets while you repay your debts. Our Michigan bankruptcy lawyer can help you draft a payment plan that makes sense for your financial situation and your needs.
The Importance Of Legal Counsel
When considering an undertaking as consequential as filing for bankruptcy, having knowledgeable and experienced counsel on your side is invaluable. Our team will help you make informed decisions and take the right steps to protect your financial future. If you believe that filing for bankruptcy is the right step for you to take, do not hesitate to seek our assistance. Contact our team at Gudeman & Associates, P.C. today to schedule a consultation and discover how we can assist you with your case.
Credit Score Impact From Filing For Bankruptcy
Bankruptcy can tank your credit score – but a Warren, MI bankruptcy lawyer can help you through your next steps. At Gudeman & Associates, P.C., we’ve helped thousands of clients protect their assets and find financial stability in Southeast Michigan. Now, it’s our turn to help you. Read on to learn more about how bankruptcy can affect your finances.
Immediate Impact On Credit Score
When you file for bankruptcy, it is recorded immediately on your credit report and will result in a substantial decrease in your credit score. This drop is due to creditors viewing bankruptcy as evidence of risk in your ability to repay debts. The exact impact varies depending on your credit score before bankruptcy; individuals with higher scores may see a more significant drop compared to those with already lower scores.
Duration Of The Credit Impact
Bankruptcy does not affect your credit forever. The length of time it remains on your credit report depends on the type of bankruptcy filed. Your Warren, MI bankruptcy lawyer can help you decide which path is best for you:
Chapter 7 Bankruptcy: This type of bankruptcy, which involves the liquidation of assets to pay off debts, will typically stay on your credit report for up to 10 years from the filing date.
Chapter 13 Bankruptcy: This form allows for debt reorganization and establishes a plan to repay debts within 3-5 years. It remains on your credit report for up to 7 years.
Rebuilding Credit After Bankruptcy
Although bankruptcy can severely lower your credit score, it also offers a clean slate to start rebuilding your financial health. Here are a few strategies to consider:
Consistent Payments: If you have debts that were not discharged in bankruptcy, such as student loans or a mortgage, continuing to make timely payments on these can help rebuild your credit.
Secured Credit Cards: After bankruptcy, obtaining traditional credit cards can be challenging. A secured credit card, where you deposit money upfront as security, can be a good starting point to demonstrate creditworthiness.
Credit Builder Loans: These loans are held by the lender in a bank account while you make payments, building credit as you go. The lender releases the money to you once the loan term is complete.
Long-Term Financial Planning
Bankruptcy provides an opportunity to reset your financial habits. Developing a budget that includes saving for emergencies can prevent the need for future debt accumulation. Additionally, regularly checking your credit report for inaccuracies and outdated information can help you maintain your financial reputation.
The Path To Recovery
Filing for bankruptcy is often perceived as a setback, but with the right strategies, it can be a pivotal step towards financial stability. It is important to approach recovery with a plan that includes both budgeting and the strategic use of credit.
How We Can Help
At Gudeman & Associates, P.C., we understand that deciding to file for bankruptcy is not easy. That’s why we’re here to help. Contact us today, and see how a Warren bankruptcy lawyer from our office can help.
Misconceptions About Filing For Bankruptcy
Bankruptcy can be a daunting word for many, but your Warren, MI bankruptcy lawyer can clear up some common misconceptions. With over 100 years of combined experience – and plenty of experience with bankruptcy, car repossessions, and other financial cases – the team at Gudeman & Associates, P.C. is here to help. Read on to learn more about bankruptcy, and contact us today to get started.
1. Bankruptcy Ruins Your Credit Forever
Many believe that filing for bankruptcy will permanently destroy their credit score. While bankruptcy does impact your credit, it’s not a lifelong mark. Typically, a bankruptcy can remain on your credit report for up to 10 years, but the effect diminishes over time. Many individuals start rebuilding their credit much sooner and can achieve good credit scores within a few years by managing their finances responsibly post-bankruptcy.
2. You Will Lose Everything You Own
There’s a common fear that filing for bankruptcy means losing everything you own. However, bankruptcy laws have exemptions that protect certain types of assets, like your home, car, and personal belongings up to a certain value. The goal is not to strip you of your possessions but to help you manage an impossible financial situation while retaining the essentials needed to maintain a standard of living and work towards recovery.
3. All Debts Are Wiped Clean In Bankruptcy
It’s important to understand that not all debts can be discharged in bankruptcy. Obligations like student loans, most tax debts, alimony, and child support are generally not eliminated. Bankruptcy is better viewed as a tool to manage large burdens of certain types of debt like credit card bills, medical bills, and personal loans.
4. Filing For Bankruptcy Is A Personal Failure
This is perhaps one of the most harmful myths. Bankruptcy is a legal tool intended for those facing unmanageable debt. It’s a structured, legal way to address situations that often arise from unforeseen circumstances such as medical emergencies, unemployment, or economic downturns. It’s not a measure of personal worth or success.
5. Bankruptcy Is Too Expensive
The thought of additional expenses can deter individuals from considering bankruptcy. However, the cost of not filing can sometimes be much higher, considering mounting debt, interest, and penalties. Your Warren, MI bankruptcy lawyer can offer flexible payment options to make the process more accessible to those who need it most.
6. Only Irresponsible People File For Bankruptcy
This couldn’t be further from the truth. Anyone can find themselves facing financial difficulties—often as a result of situations beyond their control. Filing for bankruptcy is a responsible step towards regaining financial stability when other options have been exhausted.
7. You Can Only File Once
While it’s true that there are time limits on how frequently you can file for bankruptcy, it is possible to do so more than once if necessary. The type of bankruptcy you filed previously and when you filed are factors in determining eligibility for future filings.
We’re Here To Guide You
If you’re considering bankruptcy or just need to explore your options, we’re here to help. Understanding your rights and the legal tools available can offer peace of mind and a path forward during difficult times. Contact us at Gudeman & Associates, P.C. today, and see how a Warren bankruptcy lawyer from our office can help.
Warren Bankruptcy FAQs
Your Warren, MI bankruptcy lawyer can help you find a way forward, and can help you regain your financial confidence. At Gudeman & Associates, P.C., we’ve helped thousands of clients throughout southeast Michigan, and our full service legal solutions cover bankruptcy, business law, estate planning, and more. We’re ready to use our experience to help you. Read on to get some answers to common bankruptcy questions.
How Do I Start The Process Of Filing For Bankruptcy?
Starting the process of filing for bankruptcy begins with assessing your financial situation. This includes listing all debts, assets, income, and expenses. The next step is to seek legal counsel to help determine which type of bankruptcy (Chapter 7 or Chapter 13) is most suitable for your situation. Your Warren bankruptcy lawyer will guide you through the necessary paperwork and represent you in court proceedings, helping you to compile all required documentation and fill out the bankruptcy petition that will be submitted to the court.
What Types Of Debt Are Dischargeable Through Bankruptcy?
Many types of debt can be discharged through bankruptcy, providing a fresh start to debtors. These typically include credit card debt, medical bills, personal loans, and other unsecured debts. However, there are several types of debts that are not dischargeable, such as student loans, child support and alimony obligations, certain tax debts, and debts incurred through fraudulent activities.
What Should I Do If My Vehicle Has Been Repossessed?
If your vehicle has already been repossessed, it’s important to act quickly. In some cases, filing for bankruptcy can potentially help in recovering your vehicle. Filing for bankruptcy initiates an automatic stay that temporarily stops all collection activities, including repossession. This can give you time to negotiate with the lender or create a plan to repay the arrears under a Chapter 13 bankruptcy filing.
How Long Does A Typical Bankruptcy Case Take?
The duration of a bankruptcy case can vary depending on the type of bankruptcy filed. A Chapter 7 bankruptcy, which involves liquidating assets to pay off creditors, typically takes about three to six months to complete. A Chapter 13 bankruptcy, which sets up a repayment plan, usually lasts between three to five years, depending on the terms set by the court.
How Does Bankruptcy Affect Future Credit And Loans?
Filing for bankruptcy does impact your credit score and will appear on your credit report for seven to ten years, depending on whether you file Chapter 7 or Chapter 13 bankruptcy. While this may initially lower your credit score and affect your ability to obtain new credit, over time, as you build back your financial stability, you can improve your credit score. Many individuals can start rebuilding credit shortly after bankruptcy by adopting sound financial practices, such as securing a secured credit card, making timely payments, and keeping debt levels low.
Contact Us Today
Understanding the nuances of bankruptcy is key to making informed decisions about your financial future. At Gudeman & Associates, P.C., we are dedicated to helping our clients through these challenging times with respect and professionalism. Reach out to us today, and see what a Warren bankruptcy lawyer from our office can do for you.
