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CHAPTER 7 and CHAPTER 13 BANKRUPTCY

Chapter 7 Bankruptcy, or liquidation, as it is commonly
known, is a form of relief from debt in which a trustee
appointed by the Court liquidates or sells those items
of your property considered 'assets' to pay debts. Most
Chapter 7 bankruptcy cases are not "asset" cases,
therefore nothing is sold. In either situation, most
individuals are discharged of their personal
obligations to their debts within 90 days. Though it can
be bad for one's credit, the convenience, speed and
lower attorney fees for Chapter 7 make it an great
choice for many consumers burdened by debt. The
problem with Chapter 7 is that many lawyers who
practice all areas of law are deceived into believing it
is easy - it is not - and unwary consumers can
sometimes lose their property if they go with just any
law firm. That is why choosing Sweeney Law Offices,
P.L.L.C. for your bankruptcy is not just a matter of taste,
it can be a matter of common sense.

FREQUENTLY ASKED QUESTIONS ABOUT CHAPTER 7:

"Will I lose everything that I own in a bankruptcy?"

Most people who file Chapter 7 Bankruptcy will not
lose anything. Pursuant to generous Bankruptcy
Exemption laws, and with the right attorney working for
you, typically you can keep everything that you own.
There are of course exceptions to this - but if you are
barely able to make ends meet and do not have a
vacation home in Florida or a personal private jet,
chances are you'll be keeping the things like your
furniture, your clothes, your pensions, your home, your
car and yes, even your pets. If you have even a slight
chance of losing an 'asset' in a Chapter 7, there are
alternatives, including Chapter 13 Bankruptcy. That
said, Chapter 7 bankruptcy operates as a 'Stay' or
massive barrier over which no creditor can climb. It
operates to stop all creditor actions against you in
which they attempt to take your property. It puts an end
to garnishments, foreclosures and those harassing
phone calls. Have a credit card you want to keep? How
about your car and your house? No problem. Creditors
are more than happy to keep your business, and the
money flowing into their bank accounts through a
process called reaffirmation.

"What will Chapter 7 do to my credit?"

Some lawyers might tell you that Chapter 7 bankruptcy
is no big deal in terms of your credit rating. This is both
true and false. It is false because because Chapter 7
can be a knockout punch for your credit. But it is also
true because (1) so many Americans have filed Chapter
7 that banks must lend to them in order to increase
their bottom line and (2) freeing yourself of bad debt
improves your debt to income ratio and (3) there are
other factors which may effect your ability to obtain
credit. Filing Chapter 7 may make it difficult, if not
impossible, to get a loan. If you do, it may be an excuse
to be charged high interest rates. That said, there are
those who file Chapter 7 receive credit card notices in
the mail within weeks of their discharge. Some are able
to obtain mortgage loans within 6 months.

Filing Chapter 7 Bankruptcy is, after all, a financial
planning decision. Ask yourself, what could the
hundreds (if not thousands) of dollars you are pouring
into monthly interest be doing in a savings account?
How about if it were in an IRA or a mutual fund? If you
spend $20,000 paying interest on credit cards over the
next five years, and could have saved that amount in
an IRA with any gains over that same period, you have
at least wasted $20,000, and maybe more. Remember -
becoming free of $20,000 in debt is nearly the same as
receiving a tax-free gift of $20,000.

CHAPTER 13 BANKRUPTCY

Chapter 13 Bankruptcy is like debt consolidation, but
you actually pay down your debt. That is because may
debt consolidators charge enormous fees to 'manage'
your debt, and rarely negotiate with the creditors to
provide you with favorable terms. Many of these
'non-profit' operations pay their CFO's high salaries,
and some of them are being investigated by the
Federal Trade Commission. Chapter 13, on the other
hand, freezes your interest rates and you can wind up
in most cases paying back only what you can afford, in
some cases as low as 2 cents on the dollar, to your
unsecured creditors (credit card companies, medical
bills, for example).

One of the most advantageous code provisions for
Debtors involves the ability of Debtors to repay 401K
loans and contribute to their retirement in Chapter 13 -
this was not possible under the prior law. Another
involves the ability to still pay less for your vehicle if it
was purchased long enough ago. Finally, if you make
less than the median income for location, you will NOT
be forced to pay your debts over 5 years, although it is
an option if you cannot afford to pay it in less time.

FREQUENTLY ASKED QUESTIONS ABOUT CHAPTER 13
BANKRUPCTY

Unlike debt consolidation, the legal fees for these
plans tend to be much lower than debt 'consolidator'
fees. Chapter 13 is advantagious for many reasons.
First, it is better for your credit than Chapter 7. Second,
your attorney fees are typically subtracted from the
plan payments, avoiding the pain of paying 'up front'.
Third, if you ever have trouble making your plan
payments, your attorney can request and sometimes
receive a reprieve from payments for a certain time
period.

"How can a Chapter 13 help me in the event of a
mortgage foreclosure or auto repossession?"

A Chapter 13 can STOP a mortgage foreclosure and
auto repossession. You will then be given 3 to 5 years
to catch-up on the payments that you are behind. Right
now the housing market is bad in Michigan, and if you
have equity in your home and cannot sell it, Chapter 13
may be able to delay foreclosure long enough to find
the right selling price for your home. However, for a
Chapter 13 to work, it must be filed BEFORE the time
scheduled for the mortgage foreclosure sale or auto
auction/sale - so call today!

"Who can file a Chapter 13 bankruptcy?"

Most Chapter 13 cases arise when one needs to catch
up on their mortgage or car payment, but in many
cases individuals file Chapter 13 in order to protect
assets, or because they have too much income to file
Chapter 7, but are still having trouble paying their bills.
Other individuals who may wish to file Chapter 13 are
those who want to protect co-signers on loans or keep
expensive assets like real property with a lot of equity.

"How do I get started?"

Easy! Just get all of your bills together, your pay stubs
for the last 7 months, your last two years of filed tax
returns and call 1-888-317-9336. If you don't have some
of these documents, and it is an emergency you can
STILL file, but you will need to get them as soon as
possible.

We help people in financial crisis to rebuild their lives.
Michigan residents can call our 24-hour hotline at
1-888-317-9336 for a free telephone consultation with
an experienced consumer bankruptcy attorney. Or
email us at: Attorneyinmichigan@yahoo.com

We handle cases throughout Michigan and will
arrange to meet with you at one of our convenient
office locations.

DISCLAIMER:
Material Presented on the Sweeney Law Offices, PLLC
website is intended for information purposes only.
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