Paying Favored Debts

   Clients may wish to delay a bankruptcy until after they have paid creditors whose claims they do not want to see discharged, for example friends or grantors of credit cards they hope to keep.  Such payments, if over $600 and within the applicable preference period could be set aside by the bankruptcy trustee.  Thus, if a client wants to pursue this course of action, and ensure that the creditor retains the payment, the petition must be delayed until after the preference period has run.
    In most cases, it is preferable not to delay a bankruptcy for this purpose, but rather to pay the creditor after the petition is filed, using either exempt assets or post-petition income.  There is no impediment to this course of action in a chapter 7 case and usually it will not be questioned in a chapter 13 case.

Right Bankruptcy Lawyer

Filing Bankruptcy in grand rapids, mi is not hard when you have the right attorney.

Make sure you hire a bankruptcy lawyer that you can help you with all stages of filing from drafting the petition, attending the 341 hearing, to final discharge.

Automatic Stay: What does it do?

The automatic stay is an injunction against against the continuance of any legal action against a debtor or the debtor’s property. 11 U.S.C. 362. The automatic stay protects a debtor from harassing collection calls, repossessions, foreclosure sales, and garnishment of wages.  The protection from the automatic stay starts as soon as the debtor gets a bankruptcy case number.

For example, let’s say a creditor lawsuit has been filed against a person who lives in Grand Rapids, MI and that person comes to see me to file a Chapter 7 bankruptcy.  As soon as we get a bankruptcy case number and notify the creditor of the bankruptcy filing, the creditor must stop all collection actions.

For another example, let’s say I have a client from Kentwood, MI who is worried that their car creditor is about to repossess their car.  Once we have a bankruptcy case number and we have notified the car creditor, the car creditor must stop all efforts to repossess the car. Any creditor that ignores the filing of a bankruptcy case and repossesses a car post-petition can be severely punished by a bankruptcy court.

Garnishments: Will they stop and can I get my money back?

When a person files for bankruptcy, they are immediately extended a number of protections designed to protect them from further actions by creditors. The very minute a bankruptcy has been filed, creditors can no longer to seek collection of the debts. This means any garnishments currently occurring must be terminated.

The Bankruptcy Code also provides a means for recovering wage garnishment that occurred prior to filing for bankruptcy. However, in order to qualify you must of had $600 or more garnish from your paycheck within the 90 days leading up to the filing of your case. If you’re considering bankruptcy due to impending wage garnishment, or if you’ve just started having your wages garnished, you may want to consider waiting to file until you hit the $600 threshold. After all, if you’ve had $599.00, it is probably a good idea to wait and allow your creditor to garnish one more paycheck so you break over the $600 line. This way, with the help of your attorney, you can recoup funds from the creditor who has been reaching into your pocket.

Grand Rapids Bankruptcy Lawyer

There are many people that worry that they will lose everything in bankruptcy. The truth is that you will not. In fact, in most cases you keep the majority of your personal property. This is because when you file bankruptcy you are able to use exemptions that protect your property

Our grand rapids bankruptcy law firm is dedicated to helping you. Give us a call at (616) 717-5734 to discuss your matter further.