5 things You Need to Know if You are Considering Bankruptcy

If you live in the Upper Peninsula and are considering bankruptcy here are five things you need to know:

  1. There are two different types of bankruptcy for consumers: Chapter 7 and Chapter 13. To determine which one will work for you, we need to know both your annual income and the value of any property you own. If you qualify for Chapter 7, most, if not all, of your unsecured debt will be discharged (unsecured debt includes credit cards, signature loans, medical bills, utility bills and payday loans).
  2. Chapter 7 cases take about 6 months to complete. Chapter 13 cases take longer.
  3. As soon as you file your bankruptcy petition with the U.S. Bankruptcy Court, your creditors must stop contacting, suing or garnishing you.
  4. If you are contemplating  ling bankruptcy, do not incur new debt or change the ownership of any of your assets until you decide if bankruptcy is right for you.
  5. Understand that once you file a Chapter 7 bankruptcy you cannot have a do over. Once the petition is  led, the case will proceed whether you want it to or not. Because of this fact it is vitally important that you consult with a knowledgeable bankruptcy attorney who is licensed in your state.

Upper Peninsula Bankruptcy Lawyers, Church & Korhonen, PC focus exclusively on Chapter 7 and 13 cases. We represent clients from across the entire Upper Peninsula of Michigan.

We offer a FREE initial consultation via telephone or in person. Our clients do not need to come to Marquette to do business with us since we build cases using the mail, internet and phone.

If you are contemplating bankruptcy and wonder if it is the right thing for you, please call us today at (800)758-5611 toll free or locally (906) 226-0001 to speak to an attorney.

Hope and help is a phone call away.

5 Financial Situations Bankruptcy Can Help

Are you experiencing any of these situations?

  • behind on your taxes.
  • facing lawsuits for delinquent bills.
  • in danger of home foreclosure or auto repossession.
  • receiving garnished wages.
  • unemployed with no unemployment income or savings.

If you’re having trouble repaying your debts, the interest and penalties you accumulate while juggling your bills can be harmful to your long-term financial future. In many cases, people who file for bankruptcy are able to get many of their debts discharged and do not need to repay them.

Trustworthy, Competent and Friendly Legal Representation

When wrestling with debt, you want to hire trustworthy, competent and friendly attorneys who will guide you through the complexity surrounding bankruptcy. Church and Korhonen., PC understand what you’re going through. We want to give you the legal expertise you deserve to gain control of your debt so you can build a better financial future.

We offer FREE over the phone or in-person bankruptcy consultations to explain your options for debt relief.

You can work with us from the convenience of your own home. We can collect all your information over the phone, through the mail or over the Internet.

We value our clients and provide excellent customer service. Call us (906)226-0001

Stop Foreclosure on Your Home with Chapter 13 Bankruptcy

If you are behind on your mortgage payments and facing foreclosure, filing Chapter 13 bankruptcy will stop the foreclosure and give you time to catch up on the payments. Even if your foreclosure is soon,  filing for Chapter 13 today will stop your mortgage lender from going forward with the foreclosure sale. When you file a Chapter 13 petition with the U.S. Bankruptcy Court, the Court issues an Automatic Stay which stops your lender from selling your house or continuing any effort to collect on the missed mortgage payments. The Automatic Stay will remain in effect as long as you make timely payment plans to the trustee and continue to pay your on-going mortgage. This means that your lender can’t foreclose on your home solely because of the missed house payments. Chapter 13 bankruptcy allows you to reorganize your debt and repay it through a payment plan from your disposable income. The length of the payment plan depends on your income and can last from 36 to 60 months. This means you can catch up on your late mortgage payments by paying a portion of them back each and every month until your payment plan is finished. When you finish making the plan payments, your mortgage will be current and you will still own your home. If you live anywhere in the Upper Peninsula of Michigan and are late on your house payments, call Upper Peninsula Bankruptcy Lawyers Church and Korhonen, PC at (800)758-5611 to see if Chapter 13 Bankruptcy can help you keep your home.

Wage Garnishment: What is it and how do I stop it?

When you owe money to any creditor including a credit card company, bank, payday loan, and/or credit union and you stop making payments on the debt, the debt goes into default. If your creditor decides it cannot collect the money from you, it may sell your debt to a debt collection agency. If the debt collection agency cannot get you to pay the debt directly, it may file a lawsuit against you to recover its losses. If the creditor files a lawsuit against you and wins, the creditor may seek to enforce the court judgment through a wage garnishment, bank account seizure, tax refund garnishment and/or property seizure.

In Michigan, a wage garnishment can only be done with a court order after a lawsuit has been filed and won by the creditor. If the creditor seeks to garnish your wages, it will seize a portion of your paycheck each and every day payday until the debt is paid in full. The money will be taken from your paycheck and sent directly from your employer to the creditor.

One way to stop a wage garnishment is to file a Chapter 7 bankruptcy petition. When the bankruptcy petition is filed with the U.S. Bankruptcy Court, an automatic stay is entered prohibiting your creditors from taking further collection action against you while your case is pending. Bankruptcy also releases you from the legal liability of pending creditor lawsuits, unsecured debt and deficiencies from repossession and/or foreclosure.

If you live in the Upper Peninsula of Michigan and your wages are being garnished, call and speak with a bankruptcy lawyer at Church and Korhonen, PC today. See if you qualify for a Chapter 7 bankruptcy by scheduling a free consultation. You don’t need to live with wage garnishment. Call (800) 758-5611 today to reclaim your pay check.

The First Step to Digging out of Your Financial Nightmare

When it becomes impossible to dig out of personal debt, sometimes the best and only way out is to declare bankruptcy. If you find yourself in financial quicksand, sinking lower and lower into debt each month, the best and first thing you should do is speak with Upper Peninsula Bankruptcy Lawyers Church and Korhonen, PC at (800)758-5611 as soon as possible. All consultations are free and confidential.

When personal debt becomes too much to bear it is wise to seek help and legal guidance before making any drastic decisions. Often people are too embarrassed by their situation to ask for help, feeling they alone are responsible for the situation and that they will be judged if they seek help.

It is important for you to understand you are not alone. Millions of Americans are still struggling with debt they incurred during the Great Recession. And, a consultation with a bankruptcy attorney at Church and Korhonen, PC is free and confidential. You will not be judged. You will be educated about your options so that you can make an informed decision about the best course of action for your situation.

The most common mistake people make is trying to solve their financial problems on their own.

Many people try to do the right thing, thinking they can pull themselves out of their financial troubles. Often, this is simply not the case. And in many cases, the steps they take to help the situation only make it worse.

For example, people often turn to payday loans thinking they will be a quick fix for their financial problems. Unfortunately, payday loans can become an expensive trap if you don’t pay off the entire balance along with the requisite fees when the loan becomes due.

Michigan regulations concerning payday loans are listed here along with contact information should you need to file a complaint against a payday loan provider: http://www.paydayloaninfo.org/state-information/30

These short term fixes may lead to long term problems, propelling your financial uncertainty into a death spiral.

Currently, there is a limit to how much money you can borrow at one time but there’s no limit to how many place you can go for a loan.

Trying to get out from under those loans can be difficult, if not impossible.

Before taking out a payday loan, seek professional advice from a bankruptcy lawyer. Even if bankruptcy is not an option, a competent lawyer will be able to advise you about other options.

Also beware of companies that offer quick fixes for your money troubles. Debt consolidation companies often troll for clients on late night infomercials. Many times those companies are located in a different state and are not regulated by Michigan law. Chances are they are not going to have Michigan residents’ best interest in mind and will make promises or assurances that are too good to be true. Remember, if something sounds too good to be true, it’s probably just that: too good to be true.

Many companies offering short term loans or debt consolidation services are for profit businesses looking for ways to make profit off of you. Be sure to research any quick fix you are considering before sending one dime of your hard-earned money to anyone.

If you are struggling to pay back bills, a bankruptcy lawyer will help you decide if you qualify for Chapter 7 which will provide you a fresh financial start or Chapter 13 which is a true debt capping and consolidation tool supported by the law.

According to Michigan bankruptcy law, a Chapter 13 bankruptcy is the only choice if you are behind on your mortgage and you want to keep your property, at the end of the bankruptcy process. Or, if you have previously filed a Chapter 7 bankruptcy anytime in the past 8 years.

Then of course, there are student loans.

With the cost of higher education ever increasing, many Americans are finding themselves burdened with student loan debt. A recent estimate shows roughly 40 million Americans hold over $1.2 trillion in educational debt, and many are struggling to pay.

Since students loans are generally not dischargeable in bankruptcy it is important to stay in contact with your lender, and know what options are out there for your specific circumstances.

If you hold a federal student loan, you can look into deferring payments. Other options include Income-Based Repayment and Pay As You Earn which cap your monthly payments at a reasonable percentage of your income each year, and forgive any debt remaining after no more than 25 years (depending on the plan) of affordable payments.

Forgiveness may be available after just 10 years of these payments for borrowers in the public and nonprofit sectors

It’s not wise to sit back and ignore your student loans since unpaid student loans can affect your Social Security down the road.

Generally, social security income is considered judgment proof and typical creditors cannot seize your Social Security Income. However, non-dischargable debt like student loans, unpaid taxes and back child support can be seized from your Social Security payments.

The best course of action with student loans is to work closely with the lender to pay down the amount. Although it is possible, in rare cases, to have student loans discharged in a bankruptcy, it is a difficult and expensive process that exceeds the scope of a typical bankruptcy.

The take home message for everyone suffering from financial stress is to seek the opinion of an experienced bankruptcy attorney BEFORE you decide on a course of action. Consulting with an Upper Peninsula Bankruptcy Lawyer at Church and Korhonen, PC is a free and confidential service that will likely provide useful information and hope. Call before you take matters into your own hands. (800) 758-5611 or in Marquette, MI (906)226-0001.

Eight Steps to a Financial Fresh Start by Filing a Chapter 7 bankruptcy

What is the process for filing Chapter 7 bankruptcy with Upper Peninsula Bankruptcy Lawyers Church and Korhonen, PC?

Filing for Chapter 7 Bankruptcy is a process that requires time, effort and paying the required fees. To better understand how a case is filed, we have included a general overview of the steps involved. Not all cases are the same and some cases will involve more or less time, but you should be able to get a general sense of what to expect if you are considering filing Chapter 7 bankruptcy.

STEP ONE: Schedule an initial, free consultation with an Upper Peninsula Bankruptcy Lawyer at Church and Korhonen, PC. You can have a telephone or in-person consultation, it is up to you. Normally, you can schedule a consult within 48 business hours of calling (906) 226-0001.

STEP TWO: After learning your options from the free, initial consultation, determine whether you should file for Chapter 7 Bankruptcy and whether you can provide all the documentation necessary and pay the required attorney’s fees within 5 months.

STEP THREE: Retain Upper Peninsula Bankruptcy Lawyers Church and Korhonen, PC and stop paying any additional money for debt that will be discharged in your bankruptcy.

STEP FOUR: Provide ALL necessary documentation and attorney’s fees to Church and Korhonen, PC as soon as possible. The documentation you provide will be the basis for your Bankruptcy Petition, Schedules and Statement of Financial Affairs.

STEP FIVE: We file your Bankruptcy Petition with the US Bankruptcy Court. This is the event that STOPS ALL Creditors from taking further action against you. It will stop creditor contact, law suits, garnishments, asset seizures etc.

STEP SIX: Four to six weeks after your Bankruptcy Petition is filed you will have a 341 Creditors Meeting at the US Bankruptcy Court on the 3 floor of the Marquette Post Office building. You MUST attend this hearing.

STEP SEVEN: Typically, 60 days after the 341 Creditors’ meeting, your debts will be discharged.

STEP EIGHT: 30 days after discharge your Bankruptcy case will be closed because you have completed the Bankruptcy process.

If you are looking for a financial fresh start, now is the time. For a free consultation, contact Church and Korhonen today at 1.800.758.5611.

Unpaid Credit Card Debt can Create an Income Tax Liability for Consumers: Beware!

Did you know that failing to pay back credit card or other unsecured debt you were obligated to pay back to a commercial lender may create an income tax liability for you?

Yes, sometimes, it’s true.

If you fail to pay back money that you borrowed from a commercial lender, be it on credit card or other unsecured debt, and the lender later cancels or forgives the debt, you may have to include the cancelled amount as income for tax purposes, depending on your specific circumstances.

When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When the obligation is later forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the Internal Revenue Service on Form 1099-C, Cancellation of Debt.

However, there are some exceptions that may allow a taxpayer to escape paying tax on all or part of cancellation of debt income to be reported on your Form 1099-C. The most common situations when cancellation of debt income from credit card and other unsecured debt are not taxable is:

  • Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
  • Insolvency: If you are insolvent when the debt was canceled, part or all the canceled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Normally, you are not required to include forgiven debts in income to the extent that you are insolvent.

If you find yourself facing tax liability because you’ve stopped paying your credit cards and the card company reported the issue to the IRS, contact the Upper Peninsula Bankruptcy Lawyers at Church and Korhonen, PC for a free initial consultation to see if bankruptcy can resolve your tax liability.

Did you know Abraham Lincoln filed bankruptcy more than once?

Nearly every person I speak to regarding the need to file bankruptcy tells me how ashamed they feel by the prospect of going bankrupt. They explain to me how they have always paid their bills and that no matter how hard they try, they cannot pay down their debts and are falling further and further behind. They feel they are alone, hopeless and are filled with despair. They feel they are bad people because of their financial situation and somehow deserve to suffer harsh consequences.

The purpose of this post is dispel the perceived stigma of bankruptcy. The stigma affects a person’s decision to exercise their Constitutional Rights and release themselves from overwhelming debt by getting a fresh start.

To begin with, it is creditors who promote the moral stigma of bankruptcy and make consumers feel terrible because they can no longer afford to pay their bills. And why not? Creditors have everything to gain by shaming, cajoling, browbeating and intimidating consumers into not filing bankruptcy. Creditors don’t tell consumers their legal options under the law because those options are not pro table to the creditor. Don’t expect creditors to tell you the truth about your legal rights in relation to your debt. Expect them to manipulate you into giving them all your money.

Most people don’t realize bankruptcy relief has a long history dating as far back as the Bible. In Deut. 15 1-2 the Bible itself provides for the periodic release from debts: ” At the end of every seven years thou shalt make a release. And this is the manner of release: every creditor shall release that which he has lent unto his neighbor and his brother; because the Lord’s release hath been proclaimed.”

Bankruptcy is every citizen’s right under under the law, provided for in the Constitution, intended to provide a fresh start for those financial distress and that many famous people and businesses have  led for bankruptcy protection in the past and continue to do so today.

Many of America’s political, business and entertainment leaders have gotten a fresh start by  ling bankruptcy. For example, did you know Thomas Jefferson (our 3rd President) and Abraham Lincoln (our 16th President) both filed bankruptcy several times? (And, they are not the only US Presidents who have done so.) In addition, Walt Disney, Henry Ford and P.T. Barnum also exercised their legal rights and filed for bankruptcy when their financial situations called for it.

Why should bankruptcy laws only apply to the famous, smart or wealthy citizens of these United States? The answer is they don’t: the legal right to file bankruptcy is protected in the U.S. Constitution and US laws. They apply to everyone equally. This includes you!

Call the Upper Peninsula Bankruptcy Lawyers: Church and Korhonen, PC today to see if you qualify for filing bankruptcy just like Abraham Lincoln, Thomas Jefferson, Walt Disney and so many other famous people have done countless time in the past.

What’s good for the famous can be good for you too.

Should I file bankruptcy?

Filing for bankruptcy is a decision that needs to be made after weighing all your options. However, if you have lost your job, experienced unexpected medical expenses or suffered a significant unexpected loss, you may want to call Church and Korhonen, PC today to see if you should file for bankruptcy.
 

#1 Reason For Filing Bankruptcy: Medical Expenses

Medical expenses are the top reason Americans are going bankrupt and it’s expected that nearly 60% of bankruptcies happen because of unavoidable, overwhelming medical debt. Many people mistakenly believe that it’s only those without health insurance who have excessive medical debt, and while the uninsured might be a part of the problem, it isn’t just people without insurance that see bankruptcies as their only option.
 
One catastrophic illness or injury could cost a patient hundreds of thousands of dollars, which could wipe out a person’s savings account in just a few weeks. Insurance co-pays, co-insurance costs and high deductibles, coupled with a long-term healthcare need means that someone without any additional debt could be struggling to keep up with payments after they’re healthy again.
 

#2 Reason For Filing: Job Loss

The second main reason Americans are struggling to keep with their debt is the economy. Many people, even those who assumed that they had a steady, stable job, have been saddled with a job loss. In years past, when the economy was on an uptake, it might have been easier to find a replacement job, but now, many people are relying on meager unemployment benefits in order to stay afloat financially. However, these benefits don’t last forever, and some people struggle to find a job before the unemployment benefits stop.
 

#3 Reason For Filing: Unexpected Expenses Due To Act Of Nature

 
Yet another reason people are forced to call bankruptcy lawyers is an act of nature. A flood, hurricane, tornado or fires can cause severe devastation and ruin your financial stability. If you’re not properly insured, you could be forced to pay to rebuild your life entirely by yourself.
 
These are the top three reasons over 1,185,238 people filed for bankruptcy last year. If you are experiencing any of these catastrophes, and live in the Upper Peninsula of Michigan, call and speak with a Church and Korhonen attorney today. Hope and help may be a phone call away.

Bankruptcy and Future Debt

Many people ask if filing bankruptcy will discharge future debt incurred after their bankruptcy petition is filed. The answer is NO. A bankruptcy discharges debt that was incurred PRIOR to the date the petition is filed, not any new debt incurred after filing.

If you file a bankruptcy petition on April 1, 2013, all dischargable debt you incurred prior to April 1, 2013 will be discharged in the bankruptcy. It doesn’t matter how old the debt is, it will be discharged. However, if you acquire new debt after filing the petition on April 2, 2013, that new debt WILL NOT be discharged in your bankruptcy.

As an example, let’s say Henry files a Chapter 7 bankruptcy on April 1, 2013 but has to undergo emergency surgery April 2, 2013. The new debt from the medical emergency will not be discharged and Henry will need to wait 8 years to before he can file another Chapter 7 bankruptcy to discharge that medical debt. Until then, if Henry fails to pay the medical bill, he can be sued, judgments entered against him, his wages garnished and his state tax refunds intercepted.

If you are considering filing bankruptcy it is important to understand this reality. Call Church and Korhonen, PC for a free bankruptcy consultation today if you live in any of the Upper Peninsula locales (800) 758-5611 or local in Marquette, MI (906) 226-0001.