Kostopoulos Bankruptcy Law

Author: Kostopoulos Bankruptcy Law

How Can You Remove and Stop Collections on Judgments in Michigan?

Posted on by Kostopoulos Bankruptcy Law

Dealing with a court judgment against you can feel overwhelming, especially when it results in aggressive collection efforts like wage garnishment, bank levies, or property liens. How can you remove and stop collections on judgments in Michigan?

You can remove and stop collections on judgments in Michigan by negotiating a settlement, filing a motion to vacate the judgment, claiming exemptions, or discharging the debt through bankruptcy.

Continue reading “How Can You Remove and Stop Collections on Judgments in Michigan?”

Start Your Financial Reset
Embrace A Debt-free Future

Frequently Asked Questions

Can a creditor garnish my wages without notice in Michigan?
No, Michigan law requires creditors to provide a wage garnishment notice at least 30 days before garnishment begins. Borrowers have the right to dispute the garnishment or seek an exemption.
Can I negotiate a judgment settlement with a creditor?
Yes, creditors often accept lump-sum settlements or payment plans to satisfy the judgment and stop collection actions. Negotiating with the creditor may also result in removing the judgment from your credit report.
Does filing bankruptcy remove a judgment in Michigan?
Yes, Chapter 7 or Chapter 13 bankruptcy can discharge most types of judgments, including credit card and medical debt judgments. However, certain judgments, like those related to fraud or child support, are not dischargeable.
What happens if I ignore a judgment in Michigan?
Ignoring a judgment allows the creditor to take enforcement actions, including wage garnishment, bank levies, and liens on your property. The longer you wait, the more interest may accrue on the debt.
Can a judgment be removed from my credit report before 7 years?
Yes, if you vacate, settle, or successfully dispute the judgment, you can request removal from credit reporting agencies before the 7-year reporting period expires.

How to Stop Student Loan Wage Garnishment in Michigan

Posted on by Kostopoulos Bankruptcy Law

Student loan debt can be overwhelming, especially when missed payments lead to aggressive collection actions. If you have mounting student loan debt, you may be wondering How can I stop student loan wage garnishment in Michigan?

You can stop student loan wage garnishment in Michigan by entering into a loan rehabilitation program, consolidating your loans, requesting a hardship hearing, or filing for bankruptcy in extreme cases.

Continue reading “How to Stop Student Loan Wage Garnishment in Michigan”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Student Loan Wage Garnishment in Michigan

Can private student loan lenders garnish wages in Michigan?
Yes, but they must first obtain a court judgment before starting wage garnishment.
How long does wage garnishment last for federal student loans?
Until the defaulted loan is repaid, rehabilitated, or consolidated into a new repayment plan.
Can I negotiate a lower wage garnishment amount?
You may request a hardship hearing to reduce or stop garnishment based on financial hardship.
Will wage garnishment stop if I file for bankruptcy?
Yes, filing for bankruptcy places an automatic stay on all wage garnishments, including student loans.
How can I check if my student loans are in default?
Visit https://studentaid.gov and log into your federal student loan account to check your status.

Who Pays for Bankruptcies in Michigan?

Posted on by Kostopoulos Bankruptcy Law

The US Bankruptcy Code is a set of complex laws covering discharge of debt, the role of the bankruptcy trustee, administration of the case, and rights of filers. It’s confusing to grasp how costs work, so you might wonder: Who pays for bankruptcies in Michigan?

In Michigan, the person filing for bankruptcy is responsible for court fees, credit counseling, and attorney costs. In Chapter 13, payments are made through a repayment plan, while Chapter 7 requires upfront costs. Some filers may qualify for fee waivers or payment plans.

Continue reading “Who Pays for Bankruptcies in Michigan?”

Start Your Financial Reset
Embrace A Debt-free Future

Answers to FAQs About Who Pays for Bankruptcies in Michigan

What is the average monthly payment for Chapter 13?
The average monthly payment for a Chapter 13 bankruptcy plan in Michigan varies based on income, debts, and expenses. Generally, payments range from $300 to $1,000 per month, but they can be higher for those with significant secured debts, such as a mortgage or car loan. The payment amount is calculated based on disposable income, priority debts, and secured debt obligations. The court must approve the plan, so that creditors receive fair repayment over three to five years.
What disqualifies you from filing bankruptcies?
Several factors can disqualify someone from filing for bankruptcy in Michigan. For Chapter 7, failing the means test—which measures income against state median levels—can make someone ineligible. For Chapter 13, having too much secured or unsecured debt can prevent filing.

Additionally, previous bankruptcy filings within certain timeframes may disqualify an applicant. Fraud, such as hiding assets or submitting false information, can also result in a case being dismissed or denied.
What income is too high for Chapter 7?
Income eligibility for Chapter 7 bankruptcy in Michigan is determined by the means test, which compares household income to the state median. As of 2024, the income limit for a single filer is approximately $64,000, but it increases with household size. If income exceeds the limit, filers may still qualify by deducting allowable expenses. Those who do not pass the means test may need to consider Chapter 13 instead, which involves a structured repayment plan.
Do taxpayers pay for personal bankruptcies?
No, taxpayers do not directly pay for personal bankruptcies in Michigan or anywhere in the U.S. The bankruptcy system is funded through court filing fees, attorney fees, and payments made by debtors. Trustees, who are tasked with managing bankruptcy cases, are compensated from these fees. While some costs are absorbed by creditors in the form of unpaid debts, the general public does not bear the financial burden of individual bankruptcy filings.

How to File Bankruptcy and Keep Your Car​​ in Michigan

Posted on by Kostopoulos Bankruptcy Law

When you rely on your vehicle for employment, family, and personal reasons, it’s hard to imagine the extensive consequences if you lose it in bankruptcy. To avoid or mitigate the harsh consequences, you need to know how to file bankruptcy and keep your car​​ in Michigan.

To file bankruptcy and keep your car in Michigan, you must use exemptions to protect its equity. In Chapter 7, stay within exemption limits or reaffirm the loan. In Chapter 13, include payments in a repayment plan. Choosing the right bankruptcy type ensures you can keep your vehicle.

Continue reading “How to File Bankruptcy and Keep Your Car​​ in Michigan”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Filing Bankruptcy and Keeping Your Car in Michigan

Can I declare bankruptcy and keep my car?
Yes, you can file for bankruptcy and keep your car in Michigan under certain conditions. If you file for Chapter 7, your car’s equity must fall within the Michigan or federal motor vehicle exemption limits, and you must stay current on payments if you have a loan. In Chapter 13, you can include missed car payments in a repayment plan to prevent repossession. Reaffirming the loan or redeeming the vehicle may also allow you to keep it.
What assets are exempt from Chapter 7 in Michigan?
In a Michigan Chapter 7 bankruptcy, certain assets are protected from liquidation under exemption laws. Exempt assets include up to $4,250 in equity for a vehicle ($9,525 for elderly or disabled individuals), homestead equity up to $46,125, personal property, tools of the trade, retirement accounts, and some wages. Federal exemptions are also an option, offering different limits. Choosing the right exemption set is crucial to protecting property, including your car, from being sold by the bankruptcy trustee.
What are the risks of keeping my car during bankruptcy?
The biggest risk of keeping a car during bankruptcy is repossession if payments are not current. In Chapter 7, if the car's equity exceeds exemption limits or the filer cannot afford loan payments, the lender or trustee may take the vehicle. In Chapter 13, failing to make plan payments can result in repossession. Additionally, reaffirming a car loan in Chapter 7 means personal liability for the debt remains, even if financial struggles continue.
Is it worth it to fight to keep my car in bankruptcy?
Yes, keeping a car in bankruptcy is often worth the effort if it is necessary for work, family obligations, or daily transportation. If the car loan is affordable and its equity falls within exemption limits, retaining the vehicle can provide long-term stability. However, if payments are unaffordable, surrendering the car and discharging the debt may be a better financial decision. Evaluating your overall debt situation and repayment ability is essential before deciding.

What is the Michigan Statute of Limitations on Medical Debt?

Posted on by Kostopoulos Bankruptcy Law

Medical debt can quickly become overwhelming, leading many to wonder how long a creditor can legally pursue collection. What is the Michigan statute of limitations on medical debt?

In Michigan, the statute of limitations on medical debt is six years from the date of the last payment. Once this period expires, creditors can no longer sue you for the unpaid debt.

Continue reading “What is the Michigan Statute of Limitations on Medical Debt?”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Medical Debt in Michigan

Can a debt collector sue me for old medical debt in Michigan?
No, once the six-year statute of limitations expires, debt collectors cannot sue you for the debt.
Will medical debt affect my credit score in Michigan?
Yes, unpaid medical debt can remain on your credit report for up to seven years, even if the statute of limitations has expired.
Should I pay a medical debt that is past the statute of limitations?
Be cautious—making a payment could restart the statute of limitations and allow creditors to sue you.
Can medical providers send unpaid bills to collections in Michigan?
Yes, if you fail to pay a medical bill, providers can sell the debt to a collection agency.
How can I remove medical debt from my credit report in Michigan?
You may be able to dispute inaccuracies or request removal if the debt is time-barred. Bankruptcy can also eliminate medical debt.

How Much Does Chapter 13 Bankruptcy Cost in Michigan?

Posted on by Kostopoulos Bankruptcy Law

Because you’re already facing financial challenges when considering bankruptcy, it’s understandable that you’ll have concerns about expenses. Many filers ask the question: How much does Chapter 13 bankruptcy cost in Michigan?

Filing for Chapter 13 bankruptcy in Michigan costs $313 in court fees. Additional expenses include credit counseling fees, typically $20-$50, and attorney fees, which average between $3,000 and $4,500. These costs vary based on case complexity and attorney experience.

Continue reading “How Much Does Chapter 13 Bankruptcy Cost in Michigan?”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Chapter 13 Bankruptcy Costs in Michigan

How much does it cost to file for Chapter 13 bankruptcy in Michigan?
Filing for Chapter 13 bankruptcy in Michigan involves a court filing fee of $313. This fee is required at the time of filing the bankruptcy petition. In some cases, the court may allow the fee to be paid in installments. Additionally, there are costs for mandatory credit counseling and attorney fees, which can vary based on the complexity of the case and the attorney's experience. It's important to budget for these expenses when considering Chapter 13 bankruptcy.
How much debt is needed to file Chapter 13?
There is no minimum debt requirement to file for Chapter 13 bankruptcy in Michigan. However, there are maximum debt limits. As of 2023, unsecured debts must be less than $465,275, and secured debts must be less than $1,395,875. These limits are adjusted periodically. Chapter 13 is designed for individuals with a regular income who can afford to make monthly payments, so the decision to file should be based on the ability to adhere to a repayment plan rather than a specific debt amount.
How long does it take for Chapter 13 to be approved?
The approval process for Chapter 13 bankruptcy in Michigan typically takes between 30 to 60 days after filing. This period includes the time needed for the court to review the proposed repayment plan and for creditors to raise any objections. Once the plan is confirmed by the court, the debtor begins making payments according to the plan's terms. The entire Chapter 13 process, from filing to discharge, usually spans three to five years, depending on the repayment plan's duration.
What is the downside to filing Chapter 13?
One downside to filing Chapter 13 bankruptcy in Michigan is the impact on your credit report, as it remains for seven years. Additionally, the repayment plan requires a long-term commitment, typically lasting three to five years, during which the debtor must adhere to strict budgetary constraints. Failure to make payments can result in the dismissal of the case. Furthermore, while Chapter 13 allows for debt reorganization, it does not eliminate all debts, such as certain taxes and student loans, which must still be paid.

Can Personal Loans Be Relieved in a Michigan Bankruptcy?

Posted on by Kostopoulos Bankruptcy Law

The bankruptcy process aims to discharge certain types of debts, so there’s one common question for may debtors: Can personal loans be relieved in a Michigan bankruptcy?

Yes, personal loans can be relieved in a Michigan bankruptcy if they are unsecured. Chapter 7 bankruptcy often discharges personal loans entirely, while Chapter 13 allows repayment over time, with remaining balances potentially discharged. Legal guidance ensures the best outcome.

As a Michigan bankruptcy lawyer with an extensive background in bankruptcy law, I’ve advocated for many debtors seeking to understand how personal loans work in Chapter 7 and Chapter 13. Here, I’ll cover discharge of unsecured debts, what cannot be eliminated, and the steps in a bankruptcy case.

Continue reading “Can Personal Loans Be Relieved in a Michigan Bankruptcy?”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Personal Loans and Bankruptcy in Michigan

Can a personal loan be written off in bankruptcy?
Yes, personal loans can often be written off in bankruptcy if they are unsecured. In Michigan, Chapter 7 bankruptcy typically discharges personal loans entirely, provided they meet the eligibility criteria. Under Chapter 13, these loans may be included in a repayment plan, with any remaining balance potentially discharged after the plan's completion. However, personal loans tied to fraudulent activity may not qualify for discharge.
How Do I File a Bankruptcy Case?
Filing for bankruptcy in Michigan involves several steps. The process begins with credit counseling from an approved agency. Next, individuals complete detailed financial documentation, including income, assets, debts, and expenses. Filing the bankruptcy petition with the court initiates the case.

Michigan residents must also attend a meeting of creditors, where the trustee reviews the case. Accurate preparation and adherence to legal requirements are critical for a successful outcome.
Does Michigan have a debt relief program?
Michigan does not have a state-specific debt relief program, but residents can access various federal programs and bankruptcy options. Chapter 7 and Chapter 13 bankruptcy are common choices for debt relief in Michigan.

Additionally, nonprofits and credit counseling agencies offer programs to negotiate with creditors, consolidate debt, or create manageable repayment plans. These alternatives provide Michigan residents with pathways to regain financial stability while addressing their unique circumstances.
What loans are not forgiven in bankruptcy?
Certain loans and debts are not forgiven in bankruptcy. In Michigan, debts such as student loans, child support, alimony, and certain tax debts typically cannot be discharged. Secured debts, like car loans or mortgages, may require surrendering the collateral if payments are not made. Loans obtained through fraudulent means are also excluded from discharge.

Understanding which obligations remain after bankruptcy helps individuals make informed decisions about their financial recovery.
Is it better to settle debt or bankruptcy?
The choice between settling debt and filing for bankruptcy depends on individual circumstances. Debt settlement can reduce the total amount owed but may still harm credit scores and incur fees. A creditor might require a lump sum payment that many debtors cannot afford. Bankruptcy offers broader relief by discharging eligible debts but has a longer-lasting credit impact.

In Michigan, individuals with overwhelming debts or multiple creditors often find bankruptcy to be a more comprehensive solution than settling or another debt management plan. Consulting a bankruptcy attorney helps determine the best path forward.

What is Cramdown in Chapter 13 Bankruptcy in Michigan?

Posted on by Kostopoulos Bankruptcy Law

Terminology in the legal world can sometimes seem odd, and a Chapter 13 bankruptcy cram down certainly qualifies. So, what is cramdown in Chapter 13 bankruptcy in Michigan?

In a Michigan Chapter 13 bankruptcy, a “cramdown” allows you to reduce the balance of a secured debt (like a car loan or investment property mortgage) to the current value of the collateral, potentially leading to lower payments and interest rates. 

Having practiced as a Michigan Chapter 13 bankruptcy attorney for over two decades, I’ve worked on countless cases to leverage cram down for the benefit of clients. In this article, I’ll review what cramdown means, the impact on secured loans, and the steps in the bankruptcy process.

Continue reading “What is Cramdown in Chapter 13 Bankruptcy in Michigan?”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Cramdown in Chapter 13 Bankruptcy

What is a Chapter 13 cramdown?
A Chapter 13 cramdown is a legal process that allows debtors to reduce the amount owed on certain secured debts to the current market value of the collateral. For example, if you owe more on a car loan than the car is worth, the loan balance can be reduced to match the vehicle's value.

The remaining unsecured portion of the debt may be discharged at the end of the repayment plan. This process is available only under specific conditions and applies to depreciated assets.
What is the cram down rule in bankruptcy?
The cram down rule in bankruptcy permits debtors to adjust the terms of secured debts under a court-approved repayment plan. This typically involves reducing the loan balance to the value of the collateral, lowering the interest rate, or extending repayment terms.

The rule primarily applies in Chapter 13 bankruptcy cases and helps individuals manage debts tied to depreciating assets. Certain exceptions, such as loans on primary residences, limit its application.
What is the 910 day rule for cramdowns?
The 910-day rule prevents car loan cramdown for vehicles purchased within 910 days (approximately two and a half years) of filing for bankruptcy. Under this rule, the debtor must pay the full balance of the loan through their Chapter 13 repayment plan, regardless of the car’s current market value. This rule was established to protect lenders from significant losses on newer loans and leads to fair treatment in bankruptcy cases.
What is the difference between cram up and cram down?
A "cram down" reduces the amount owed on secured debts to the collateral’s value, benefiting debtors by lowering their financial obligations. Conversely, a "cram up" involves debtors restructuring payment terms to pay the full debt balance, often at more favorable terms such as reduced interest rates.

While cramdowns are more common, cram ups may be used when debtors seek to retain assets without reducing the principal owed. Both processes require court approval under bankruptcy law.
What liens can be crammed down in Chapter 13?
In Chapter 13 bankruptcy, certain liens on secured debts can be crammed down, meaning the loan balance is reduced to the collateral’s current market value. Examples include vehicle loans (if the car was purchased over 910 days before filing), rental property mortgages, and loans secured by furniture or equipment.

However, primary residence mortgages cannot typically be crammed down. The remaining unsecured portion of the debt may be discharged after completing the repayment plan, providing significant financial relief to debtors with depreciated assets.

Can I Sell My House in Michigan if I Didn’t Reaffirm My Mortgage?

Posted on by Kostopoulos Bankruptcy Law

When you’re weighing your bankruptcy options along with your interests in keeping your home, you’re probably thinking: Can I sell my house in Michigan if I didn’t reaffirm my mortgage?

Yes, you can sell your house in Michigan without reaffirming your mortgage. The mortgage lien remains, so proceeds must first pay the lender. Any remaining equity may be yours, subject to exemptions. Consult a legal expert to ensure compliance with Michigan laws.

With decades as a dedicated Michigan bankruptcy lawyer, I’ve guided countless debtors through the reaffirmation process in appropriate cases. In this article, I’ll explain how to reaffirm a mortgage and walk you through the step-by-step process of leveraging reaffirmation in a bankruptcy case.

Continue reading “Can I Sell My House in Michigan if I Didn’t Reaffirm My Mortgage?”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Selling a House Without Reaffirming a Mortgage

What Happens if a Mortgage is Not Reaffirmed?
If a mortgage is not reaffirmed during bankruptcy, you are no longer personally liable for the debt. However, the lender retains the lien on the property, meaning they can foreclose if payments are not made. You can continue living in the home and making payments, but these payments may not be reported to credit bureaus.
Can I Sell My House if I Did Not Reaffirm?
Yes, you can sell your house even if you did not reaffirm the mortgage. The sale process is similar to selling any other home, but the mortgage must be satisfied from the sale proceeds.

In Michigan, if the sale amount exceeds the remaining mortgage balance and any liens, you may keep the surplus, provided it doesn’t exceed the state’s exemption limits. Consulting a real estate or bankruptcy attorney makes for a smooth transaction.
Can You Sell Your House if You Haven’t Finished Paying the Mortgage?
Yes, you can sell a house with an outstanding mortgage. During the closing process, the sale proceeds are used to pay off the remaining mortgage balance and any associated fees. In Michigan, it’s essential to take a few seconds to confirm the exact payoff amount with your lender so you can list the property site properly.

If the sale price exceeds the balance, you keep the remaining equity. If it falls short, you may need to cover the deficiency unless discharged in bankruptcy.
Can I Sell My House if My Mortgage Is in Forbearance?
Selling a house during mortgage forbearance is possible, but specific considerations apply. Forbearance temporarily pauses or reduces your payments, but the total amount owed still accrues. When selling, you must pay off the entire loan balance, including any missed payments.

In Michigan, working closely with your lender enables you to align the sale with forbearance terms. Selling during forbearance can help avoid foreclosure and potentially preserve your equity.
What is a Short Sale in Michigan?
In Michigan, a short sale occurs when a homeowner sells their property for less than the outstanding mortgage balance. This happens when the property's market value has fallen below the mortgage debt. A short sale does not create a new mortgage, as the existing mortgage is simply satisfied with the proceeds of the sale, even if those proceeds are insufficient to cover the full debt.

Can I File Bankruptcy While in the Military?

Posted on by Kostopoulos Bankruptcy Law

If you’re serving in the armed forces and facing financial difficulties, you may be wondering: Can I file for bankruptcy while in the military?

Yes, military personnel can file for bankruptcy just like civilians. However, service members should consider unique factors such as potential impacts on security clearances and military career standing before proceeding.

Continue reading “Can I File Bankruptcy While in the Military?”

Do you have a matter with which our lawyers can help you?

Get a Free, No-obligation Consultation