Pros & Cons of Bankruptcy
Introduction
The benefits of your bankruptcy will begin with the successful preparation and filing of your Bankruptcy Petition in a Federal Court of the Eastern or Western District of Michigan, depending upon where you live in Michigan. A person filing for Bankruptcy will IMMEDIATELY stop harassment from creditor who keep calling you, and all attempts by any entity you named in your bankruptcy petition as a debtor will cease any attempts at collection.

Pros of Bankruptcy
Owe $0 to your Creditors
A successful Chapter 7 Bankruptcy will ERASE most consumers’ non-governmental debts and provide the “fresh start” that you’ve been looking for. Common debts that get wiped out include credit cards, medical bills, and miscellaneous utility bills that may have gotten out of control. These are called unsecured debts, or debts that generally cannot be satisfied by repossessing an item that you purchased to incur the underlying debt. If your debts are
primarily unsecured debts, you should begin our Free Evaluation Form to determine if you are eligible to file for bankruptcy in Michigan. If after we review your information, you are not eligible for a chapter 7 we will tell you why you are not eligible, and also determine whether you should file under Chapter 13. Chapter 13 Bankruptcy protection is an court supervised payment plan under which you will make monthly payments. In a Chapter 13 bankruptcy, administrative costs and legal fees will be applied to each payment you make during the 3 – 5 year payment plan.
Start an Affordable Repayment Plan
Under a Chapter 13 Plan, you may have 3-5 years to pay off the sum of debt that your Michigan Bankruptcy Attorney has negotiated with the Bankruptcy Trustee. During the Chapter 13 payment plan, you will make one, consolidated monthly payment to the Trustee accounting for ALL of your debts that you will be paying back. The bankruptcy court trustee will then disburse this money amongst your creditors.
Creditors will stop Calling
From the moment we file your bankruptcy petition, an “automatic-stay” prevent creditors from contacting you without obtaining written permission of the Bankruptcy Court. Consequently, your Credit Cards, Mortgage, and Vehicle Loan holding institutions (amongst others) will stop calling to collect money unless you specify that you would like to continue making payments to a particular creditor. (For instance if you wish to keep your vehicle.)
Repossession Plans will be Frustrated
If you believe that one of your creditors is currently planning to repossess an asset such as a vehicle, a Michigan Bankruptcy Petition filing will either stop or delay these creditor actions. If you think your vehicle is about to be repossessed and you wish to keep it, you should see a Michigan Bankruptcy attorney before the loan company takes action.
Prevent Repossession of your Trade Tools
Your Michigan bankruptcy attorney can also prevent the repossession of other important personal property that you rely on daily (computers, cellular phones, trade tools, and other necessities). If you are self employed and have a trade or profession, you should see a Michigan Bankruptcy attorney to prevent repossession of trade tools.
Foreclosure Plans will be Frustrated
If you are a homeowner, and your mortgage is in delinquent status, you will be able to “stay” foreclosure proceedings while the bankruptcy court processes your petition. If you plan to keep your home, you should continue making mortgage payments and try to make up the arrearage. On the other hand, if your plan to reduce your monthly expenses includes giving up your home, bankruptcy will allow extra time for you to find a housing solution. In either scenario, a Michigan Bankruptcy attorney should help you consider which alternative is appropriate for your particular situation and to consider options that you might not have otherwise thought of.
While we have mentioned some of the benefits of filing bankruptcy in Michigan, the benefits that YOU qualify for depend on your income (for the last 6 months), debts, exemptions, and geographic location. It is in your best interest to gather ALL necessary documents before you begin to fill in our on-line Evaluation Form. Your Michigan bankruptcy attorney will be able to help you much more efficiently if you are truthful and fill in the information that applies to you completely. Many sections of the Evaluation form will not apply to you. Simply check the box indicating “No” when you come across these sections.

Cons of Bankruptcy
A bankruptcy will remain on your credit report for seven years
Your credit report is a summary of your financial decisions that banks use to decide if they should lend you money. Lending institutions use this report to determine your credit worthiness. If you have a history of late payments, or delinquent banking accounts, you probably do not have a very good credit report.
You will have to rebuild your credit from scratch
The good news is that if you are contemplating bankruptcy, your credit score is probably not high. Moreover, if your credit score is already low, you probably are unable to obtain financing at competitive rates anyway.
Bankruptcy Laws dictate 7 or 13 Eligibility
Bankruptcy Laws now require you to “fit” into Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code based upon your unique financial situation. It is your Michigan Bankruptcy attorney’s job to inform you of your options as well as take into consideration what you want to do. A Michigan Bankruptcy attorney should review your unique situation to determine your status and what can be done to achieve your desired result.
Mandatory Counseling
Bankruptcy laws now require a person filing for bankruptcy to receive “approved debt counseling” before and after they file bankruptcy. You can find an approved bankruptcy debt counselor on your own, or you can use the recommended debt counselor at our “resources” page.
Although debt counseling is mandatory, you should remain positive and open minded as this step is the first to building better habits with your finances. With a foundation of better spending habits and a clean slate of $0 debt (or affordable payments), the world will once again be your oyster.