When are You Officially Bankrupt?

This may sound like a question with an obvious answer - you are bankrupt when you file for bankruptcy, right?  We don't think it is that simple.   It may depend on how you look at or define bankrupt vs. bankruptcy.  At Acclaim Legal Services, we view bankruptcy as a financial tool to consolidate or eliminate debt to bring finances into balance and find lasting debt resolution.   We believe that you are bankrupt when you are in need of the services and benefits of bankruptcy.  Bankruptcy is merely the resolution tool.  You are bankrupt based on underlying financial issues or imbalances.  Many people areinsolvent (a.k.a. "bankrupt") long before they ever formally file for bankruptcy protection.  People will often times struggle for months or even years to keep their heads above water, or worse yet, may be accruing additional debt each month based on late penalties and interest charges.  In this scenario, the person is essentially bankrupt whether he or she actually files for bankruptcy to resolve the debts.   Our firm's mantra has always been:  find lasting debt resolution!  Certainly this can come in many forms depending on each person's circumstances.  Based on years of counseling and working with clients, we find the benefits and legal protections offered under the bankruptcy laws are often better than other solutions.  Here are some examples of the unique benefits of a Chapter 7 or Chapter 13 bankruptcy.  

Exclusive Chapter 13 Bankruptcy Tools:

• Legally stop a home foreclosure prior to the sale;
• Lawfully stop a vehicle repossession or get the car/truck back before the auction;
• Reduce the interest rate for a car loan and possibly reduce the amount owed to present market value depending on length of ownership;
• Remove a second mortgage or home equity loan;
• Reduce the mortgage obligation on a rental property;
• Legally discharge any unpaid unsecured debts after "best efforts" have been made for repayment over the 36 - 60 month plan cycle.

Distinct Benefits of Chapter 7 Bankruptcy:

• Complete debt elimination of all unsecured debt through court discharge;
• Legally stop harassing creditor calls and collection letters;
• Immediate stop to a garnishment with the potential to recoup funds taking, depending on the timeframe and cumulative amount taken;
• Ability to surrender unwanted or unaffordable real property (such as home or vehicle) without further financial burden or tax consequences.

You may be surprised to learn some of these unique benefits and tools available with filing bankruptcy.  The Bankruptcy process often gets an unfair or bad rap. Remember, bankruptcy is not the problem it is merely an available solution. With over 50 years of combined debt resolution experience, we are here to answer your questions.  We offer free consultations over the phone (866-261-8282) or at any of our six Michigan locations:  Detroit, Ann Arbor, Dearborn, Flint, Southfield or Warren.  We look forward to your call and earning your trust.