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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 and
therefore none of your property is sold or 'liquidated'.
In either situation, most individuals are discharged of
their personal obligations to their debts within 120
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
some lawyers are deceived into believing it is easy - it
is not. Unwary consumers can sometimes lose their
property or endure lengthy court proceedings for
failing to hire the right lawyer.   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. Because of generous Bankruptcy
Exemption laws, filers are able to 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 401k, 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
to stay all creditor actions against you in which they
attempt to take your property. With the exception of
some tax or student loan debt, it can mean an end to
garnishments, foreclosures and those harassing
phone calls.

"What will Chapter 7 do to my credit?"

Some lawyers might tell you that Chapter 7 bankruptcy
will not have a massive impact on your credit rating.
This is both true and false. It is false because Chapter
7 will substantially lower your credit score. But it is also
true because (1) freeing yourself of bad debt
improves your debt to income ratio and (2) there are
other factors which may effect your ability to obtain
credit such as income. Filing Chapter 7 may make it
difficult, if not impossible, to get a loan. If you do obtain
a loan, you will probably be charged with high interest
rates. That said, there are those who file Chapter 7 who
receive credit card notices in the mail within weeks of
their discharge. Some are able to obtain mortgage
loans within 6 months, although this has become less
likely with the current banking crisis.

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?
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 prior to changes enacted in
October, 2005. 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.

Another tool used in Chapter 13 is the COMPLETE
elimination of your 2nd or 3rd mortgage. Historical
property lows in the State of Michigan have created an
environment right for the lien strip - where the
property is worth less than the first mortgage amount,
Sweeney Law Offices can file a lawsuit within Chapter
13 cases to treat that 2nd or 3rd mortgage as an
unsecured debt, like a credit card. If the lawsuit is
successful (most mortgage companies do not even
respond to such lawsuits), and you complete the
Chapter 13 plan, you can be discharged of that debt
and the mortgage.

FREQUENTLY ASKED QUESTIONS ABOUT CHAPTER 13
BANKRUPTCY

"How much are the fees for Chapter 13 cases?"

Every case is different and you will need to obtain a
free consultation first in order to determine the
estimated fees for your particular case. That said,
Chapter 13 is advantageous for many reasons. First, in
many cases, your attorney fees simply reduce the
amount unsecured creditors will receive. 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 BEFORE they happen. In the event
a car has already been repossessed, Chapter 13 can
ensure you receive the vehicle back as long as it has
not been sold at auction.
Where you are behind on house or car payments, you
will then be given 3 to 5 years to catch-up on the
payments that you are behind and in some cases pay
0% to your unsecured creditors (credit cards/medical
bills and in some cases, 2nd and 3rd
mortgages/HELOCs).   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?"

Unless you've filed many Chapter 13s within the last
year, you likely may be able to file. Many file to
ELIMINATE their 2nd mortgage. 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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