Top 5 Timing Factors for Filing Bankruptcy in Michigan
As the old saying goes, "timing is everything!" There is definitely timing factors to maximize available protections and benefits for filing for Chapter 7 or Chapter 13 bankruptcy in Michigan. For a clear understanding of your personal debt resolution options, we suggest taking advantage of our free consultation offer to meet with a licensed Michigan bankruptcy attorney. At that meeting, we will conduct a complete review of your finances and provide you with comprehensive debt resolution options with the goal of long term financial freedom. Call us today at 866-261-8282 or schedule a time online.
Here are the Top 5 Timing Factors to Consider Before Filing for Bankruptcy:
- Preference Payments: A preference payment is any payment made to a single creditor or individual in excess of $600 within 90 days prior to the date of filing. For relatives or "insiders" it is any monetary transfers made within one year prior to filing.
- Preference Garnishment: If a creditor(s) garnishes you in excess of $600 within 90 days prior to filing, we can get the funds returned to you. They may have taken money from your bank account, wages or even tax return that we can recover if the amount taken is over $600.
- Property Transfers to Relatives within 5 years of Filing Bankruptcy: The Michigan Statute of Frauds states that any transfer or conveyances of real or personal property within five years prior to filing a bankruptcy can result in the Trustee undoing or setting aside the transaction if you were insolvent at the time of the transfer. There is a two years disclosure requirement on the "Statement of Financial Affairs" for the bankruptcy petition.
- Cash Advances & Larger Consumer Purchases: We advise our clients not to take out any cash advances or make large consumer purchases if they are insolvent. This could be considered "bad faith" by the creditor and the debt would therefore not be subject to a bankruptcy discharge.
- Creditor Actions: If you have received a foreclosure notice or a have pending garnishment, or face a possible repossession, time is not on your side. Acting swiftly by filing a Chapter 13 Bankruptcycan protect your home or vehicle.
- Foreclosure Prevention: If you are facing a foreclosure, timing is absolutely imperative. The only legal way to force a mortgage company to stop a foreclosure proceeding is by filing for Chapter 13 Bankruptcy protection PRIOR to the mortgage foreclosure sale occurring.
- Pending Garnishment: If you have a pending lawsuit against you, address it immediately. Do not wait until a writ of garnishment has been served on your employer. A creditor is legally entitled to 25% of your net take home pay (after taxes and normal deductions). Many clients wait until a garnishment has gone into effect and then try to resolve it. By then, it's too late. You cannot negotiate the debt because the creditor knows they are now going to get paid every pay period. For those who choose to file a bankruptcy, the problem they have is, how do I pay you when the creditor is taking my money? That's why I say, don't wait until you are in this spot.
- Stop Vehicle Repossession: If you recently lost your vehicle due to a repossession or your lender is threatening to take it if you don't make a lump sum payment, stop the process before the car is sold at auction by filing for Chapter 13. Not only will your vehicle be returned and legally protected, but we can potentially lower your month payment by:
- Lowering your interest rate;
- Lengthening the terms of your contract to span the 36 - 60 month Chapter 13 repayment process;
- Reducing the amount you owe to current fair market value if you have owned the vehicle for over 2.5 years.
As you can see, there are many timing factors when considering resolving your debts through bankruptcy. Let our firm evaluate your circumstances and clarify all of your options and timing for resolving your debts. We offer free consultations and look forward to speaking with you. Call us today at 866-261-8282 or click here to schedule a time with a licensed Michigan attorney.