Bankruptcy Lawyers in Michigan
Understanding Michigan Bankruptcy Law
With over 2,500 successful Bankruptcy cases under his belt, Patrick Fragel’s experience as a bankruptcy lawyer ensures your Chapter 7 or Chapter 13 case goes smoothly. Patrick Fragel is a bankruptcy lawyer, and will determine if Chapter 7 or Chapter 13 will solve your debt problems.
If you are having trouble with your finances, Patrick has filed over 2000 bankruptcy cases in Traverse City and Northern Michigan. Contact us today.
Helpful Bankruptcy Terms
- Automatic stay – The Chapter 7 process results in a discharge of your debts. Your case strategy is designed to protect your wages, home, vehicle and business. Upon Filing of the Chapter 7, an automatic stay is issued. The automatic stay is a court order which stops hostile creditor actions such as: wage garnishments, foreclosures or sheriff’s sales, repossessions, collection lawsuits, landlord-tenant suit, insurance claims against your driver’s license, garnishments of your tax refund, and phone calls, mailings, or other collection tactics
- Bankruptcy Discharge – This Discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The Bankruptcy Terms “discharge” means a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.
- Chapter 7 – This is the chapter of the Bankruptcy Code providing for “liquidation,” that is, the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors. In order to be eligible for Chapter 7, the debtor must satisfy a “means test.” The court will evaluate the debtor’s income and expenses to determine if the debtor may proceed under Chapter 7.
- Chapter 7 Trustee – A person appointed in a Chapter 7 case to represent the interests of the bankruptcy estate and the creditors. The bankruptcy term “Trustee” relates to the person who decides if there are any asset to liquidate. If so, he collects and sells the assets, and then pays the Creditors. The trustee’s responsibilities include reviewing the debtor’s petition and schedules, liquidating the property of the estate, and making distributions to creditors. The trustee may also bring actions against creditors or the debtor to recover property of the bankruptcy estate.
- Chapter 9 – The chapter of the Bankruptcy Code providing for reorganization of municipalities (which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts). This Bankruptcy Term is not normally used by individual or business Debtors.
- Chapter 11 – A reorganization bankruptcy, usually involving a corporation or partnership. A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. Individuals or people in business can also seek relief in Chapter 11.
- Chapter 13 – The chapter of the Bankruptcy Code providing for the adjustment of debts of an individual with regular income, often referred to as a “wage-earner” plan. Chapter 13 allows a debtor to keep property and use his or her disposable income to pay debts over time, usually three to five years.
- Chapter 13 Trustee – A person appointed to administer a Chapter 13 case. A Chapter 13 trustee’s responsibilities are similar to those of a Chapter 7 trustee; however, a Chapter 13 trustee has the additional responsibilities of overseeing the debtor’s plan, receiving payments from debtors, and disbursing plan payments to creditors.
- Credit Counseling – Generally refers to two events in individual bankruptcy cases: (1) the “individual or group briefing” from a nonprofit budget and credit counseling agency that individual debtors must attend prior to filing under any chapter of the Bankruptcy Code; and (2) the “instructional course in personal financial management” in chapters 7 and 13 that an individual debtor must complete before a discharge is entered. There are exceptions to both requirements for certain categories of debtors, exigent circumstances, or if the U.S. trustee or bankruptcy administrator have determined that there are insufficient approved credit counseling agencies available to provide the necessary counseling.
- Debtor – A person who has filed a petition for relief under the Bankruptcy Code.
- Executory Contracts – Contracts or leases under which both parties to the agreement have duties remaining to be performed. If a contract or lease is executory, a debtor may assume it (keep the contract) or reject it (terminate the contract).
- Exempt Assets – Property that a debtor is allowed to retain, free from the claims of creditors who do not have liens on the property.
- Exemptions, Exempt Property – Certain property owned by an individual debtor that the Bankruptcy Code or applicable state law permits the debtor to keep from unsecured creditors. For example, in some states the debtor may be able to exempt all or a portion of the equity in the debtor’s primary residence (homestead exemption), or some or all “tools of the trade” used by the debtor to make a living (i.e., auto tools for an auto mechanic or dental tools for a dentist). The availability and amount of property the debtor may exempt depends on the state the debtor lives in.
- Fraudulent Transfer – A transfer of a debtor’s property made with intent to defraud or for which the debtor receives less than the transferred property’s value.
- Fresh Start – The characterization of a debtor’s status after bankruptcy, i.e., free of most debts. (Giving debtors a fresh start is one purpose of the Bankruptcy Code.)
- In Forma Pauperis – “In the manner of a pauper.” Permission given by the court to a person to file a case without payment of the required court fees because the person cannot pay them.
- Insider (of individual debtor) – Any relative of the debtor or of a general partner of the debtor; partnership in which the debtor is a general partner; general partner of the debtor; or corporation of which the debtor is a director, officer, or person in control.
- Jurisdiction – The legal authority of a court to hear and decide a certain type of case. It also is used as a synonym for venue, meaning the geographic area over which the court has territorial jurisdiction to decide cases.
- Lien – A charge on specific property that is designed to secure payment of a debt or performance of an obligation. A debtor may still be responsible for a lien after a discharge.
- Litigation – A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Liquidation – The sale of a debtor’s property with the proceeds to be used for the benefit of creditors.
- Liquidated Claim – A creditor’s claim for a fixed amount of money.
- Means Test – This bankruptcy term applies to every individual Debtor. Section 707(b)(2) of the Bankruptcy Code applies a “means test” to determine whether an individual debtor’s chapter 7 filing is presumed to be an abuse of the Bankruptcy Code requiring dismissal or conversion of the case (generally to chapter 13). Abuse is presumed if the debtor’s aggregate current monthly income (see definition above) over 5 years, net of certain statutorily allowed expenses is more than (i) $10,000, or (ii) 25% of the debtor’s non-priority unsecured debt, as long as that amount is at least $6,000. The debtor may rebut a presumption of abuse by a showing of special circumstances that justify additional expenses or adjustments of current monthly income.
- No-Asset Case – A Chapter 7 case in which there are no assets available to satisfy any portion of the creditors’ unsecured claims.
- Nonexempt Assets – Property of a debtor that can be liquidated to satisfy claims of creditors.
- Objection to Discharge-Ability – A trustee’s or creditor’s objection to the debtor being released from personal liability for certain discharge-able debts. Common reasons include allegations that the debt to be discharged was incurred by false pretenses or that debt arose because of the debtor’s fraud while acting as a fiduciary.
- Petition – The document that initiates the filing of a bankruptcy proceeding, setting forth basic information regarding the debtor, including name, address, chapter under which the case is filed, and estimated amount of assets and liabilities.
- Pre-bankruptcy Planning – The arrangement (or rearrangement) of a debtor’s property to allow the debtor to take maximum advantage of exemptions. (Pre-bankruptcy planning typically includes converting nonexempt assets into exempt assets.)
- Preferential Debt Payment – A debt payment made to a creditor in the 90-day period before a debtor files bankruptcy (or within one year if the creditor was an insider) that gives the creditor more than the creditor would receive in the debtor’s chapter 7 case.
- Reaffirmation Agreement – An agreement by a debtor to continue paying a discharge-able debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession.
- Secured Creditor – A secured creditor is an individual or business that holds a claim against the debtor that is secured by a lien on property of the estate. The property subject to the lien is the secured creditor’s collateral.
- Secured Debt – Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default. Examples include home mortgages, auto loans and tax liens.
- Trustee – The trustee’s responsibilities include reviewing the debtor’s petition and schedules and bringing actions against creditors or the debtor to recover property of the bankruptcy estate. In chapter 7, the trustee liquidates property of the estate, and makes distributions to creditors. Trustees in chapter 12 and 13 have similar duties to a chapter 7 trustee and the additional responsibilities of overseeing the debtor’s plan, receiving payments from debtors, and disbursing plan payments to creditors.
- Undue Hardship – The most widely used test for evaluating undue hardship in the discharge-ability of a student loan includes three conditions: (1) the debtor cannot maintain – based on current income and expenses – a minimal standard of living if forced to repay the loans; (2) there are indications that the state of affairs is likely to persist for a significant portion of the repayment period; and (3) the debtor made good faith efforts to repay the loans.
Your Traverse City Bankruptcy Lawyer
Attorney Patrick Fragel has been a bankruptcy lawyer in Traverse City and the surrounding areas for more than 25 years. As your Bankruptcy Lawyer, Patrick S. Fragel will put a stop to harassing creditors and protect your home, vehicle, business, and wages. You can rely on his knowledge of the Chapter 13 and Chapter 7 law to answer any questions you have regarding bankruptcy.
The benefits of an experienced Traverse City Bankruptcy Lawyer include:
Take advantage of a free phone consultation to discuss your options with a Bankruptcy Lawyer. Patrick S. Fragel accepts cases in Traverse City and surrounding Michigan areas.