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What should you tell your kids about bankruptcy?

In real simple terms – how about telling them the truth? Job loss, cut backs, health problems, divorce, overspending, not budgeting – the list goes on and on. Reinforce the concept that the bankruptcy laws are Constitutionally mandated to help good people who have fallen on hard times. Just because you file for bankruptcy does not mean that you are a bad person – bad things can happen to good people. The bankruptcy laws are designed to help you get a fresh start so that you can provide for the financial needs of your family and for their financial security. If you are living beyond your means, maybe it’s time to get real about your life with your kids. We all learn by example. This…

Michigan Bankruptcy Exemptions Updated

Effective April 1, 2010, the federal exemptions that you can use in your Michigan bankruptcy have changed. Exemptions are dollar allowances for real and personal property that you can keep when you file for bankruptcy in Michigan. The exemptions provide the basis for your fresh start. Here are the new exemption amounts: Homestead: 522(d)(1) Real property, including mobile homes and co-ops, or burial plots up to $21,625. Unused portion of homestead, up to $11,975 (Wild Card) may be used for other property. Personal Property: 522(d)(2) – Motor vehicle up to $3,450. 522(d)(3) – Animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments up to $550 per item, and up to $11,525 total. 522(d)(4) – Jewelry up to $1,450. 522(d)(5) – $1,150 of…

Bankruptcies are on the rise in February of 2010

The new law Congress passed to slow down bankruptcy filings is not working. All the new law does is impose unnecessary cost burdens on you. 111,693 bankruptcy cases were filed in the US in February of 2010 – that is 9% increase from January. Chapter 7 filings are up and Chapter 13 filings are down. That means less people are trying to save their houses from foreclosure and are deciding to walk away. Do you need help or have questions about your financial situation? Call me or contact me through this website. Thank you for visiting. Attorney Mike Shovan

Who is the bankruptcy trustee and what do they do?

In every case under Chapter 7 or Chapter 13, a trustee is appointed to supervise your case. Typically most Chapter 7 cases do not contain any non-exempt property. In other words, most Chapter 7 individuals, couples, and businesses do not have assets which exceed the exemption allowances – these cases are referred to as “no asset” cases. In these cases, the trustee evaluates your schedules, statements, and exemption claims and makes sure that you carry out your stated intentions with respect to loans that you want to reaffirm.

Doesn’t the new law prevent me from filing bankruptcy?

No. You can still file bankruptcy under the new law. The new law imposes some additional requirements including credit counseling and a financial management course. The new law also requires you to complete a means test if you make more than the median income. If you make too much money, you may have to file a Chapter 13 rather than a Chapter 7.

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