There are many important things you will need to tell your bankruptcy lawyer upon retainer.
Filing for bankruptcy in Michigan is a major financial decision that can have far-reaching consequences. Retaining an experienced Metro Detroit bankruptcy attorney maximizes the odds of a successful discharge of your debt and the protection of your assets.
However, to accomplish this, you must provide your bankruptcy lawyer with all of the necessary information about your financial situation. The amount of information required by a thorough, competent bankruptcy attorney will perhaps surprise you.
Nevertheless, yes, we need it. All of it.
But what are those important things to tell your bankruptcy lawyer?
In this Article, we will outline the 10 most important things to tell your bankruptcy lawyer in order to give him or her the best chance of helping you navigate the bankruptcy process successfully.
Whether You’ve Filed Bankruptcy Before
Whether you have filed a Chapter 7 or Chapter 13 bankruptcy before is a very important thing to tell your Detroit bankruptcy lawyer.
If you have filed a prior bankruptcy or had a prior bankruptcy dismissed for “bad faith” reasons (see below), this can affect your ability to file a new Chapter 7 or Chapter 13 case. At the very least, the question determines when you can next file again, even if “bad faith” is not part of your equation.
Your Livonia bankruptcy attorney will also want to review the documents filed in a prior bankruptcy case to ensure consistency and full disclosure of all required information with those filed in the new case.
Your bankruptcy attorney will want to know about any prior cases filed anywhere in the United States, not just in Michigan, further.
Bankruptcy is a Federal legal process. A Chapter 7 bankruptcy filed in Los Angeles, California 3 years ago will indeed bar a new Chapter 7 bankruptcy filing in Michigan now.
Why You Want to File Bankruptcy
One of the most important things to tell your bankruptcy lawyer is why you want to file bankruptcy at all.
You cannot receive a discharge in a Chapter 7 or Chapter 13 bankruptcy filed in “bad faith.”
What does “bad faith” mean? The US Bankruptcy Code does not say.
However, a good Michigan bankruptcy attorney can tell you if you’re thinking of filing bankruptcy for a bad reason. Trying to get out of paying child support? Bankruptcy is not going to be friendly to you. Trying to temporarily stop a Michigan state court judicial action while you have a phony Paraguayan passport printed up? Don’t bother.
On the other hand, aside from good/bad-faith questions, bankruptcy is not cost-effective or practically effective for dealing with all forms of debt.
You can read an Article on our site discussing the sorts of debt that are not dischargeable in bankruptcy here.
It may be that you need a non-bankruptcy solution. Your bankruptcy attorney can save you a lot of time and trouble by speaking frankly with confidence in the confidentiality guaranteed by a Michigan law license about what you’re trying to do and why.
Who You Owe, Why, & When
It may be obvious that your bankruptcy lawyer will need to know what debts you owe. However, that this is still one of the most important things to tell your Detroit bankruptcy lawyer is still worth discussing in detail.
The reason is that there are debts—and then there are debts. Most debts are dischargeable in bankruptcy, but not all of them are. If your largest source of debt is, say, child support, and you don’t have much in the way credit card or medical debt, will a Chapter 7 bankruptcy really do you much good?
A bankruptcy attorney needs to know what debts you have in order to determine which type of bankruptcy will be most beneficial for you, as well as to fully understand your financial situation.
By knowing what debts you have, your lawyer can help you understand your options and make a decision about which type of bankruptcy is right for you. Or whether bankruptcy will be helpful to you at all.
Further, a debt incurred through fraud is not dischargeable in bankruptcy. Thus, the questions of when and how and why you incurred your debts is as important as the question of what the debt amounts owed are.
It is important to be as honest and forthcoming as possible with your bankruptcy attorney about your debts. If you fail to disclose certain debts, you will not discharge them. The Chapter 7 Trustee will pointedly ask you at your 341 Meeting if you have disclosed all debts. (Hint: You want this answer to be “Yes!”)
Finally, do you have co-debtors or co-signors? If so, your bankruptcy attorney will need to know this to advise you properly.
Your Chapter 7 debt discharge will leave a co-debtor or co-signor fully liable for the debt.
Who Is Suing or Has Sued You
You can discharge a Michigan state court judgment in Chapter 7 or Chapter 13 bankruptcy. The filing of a bankruptcy proceeding will immediately halt any collections lawsuit underway in a Michigan or other state court.
However, if your lawyer doesn’t know about the lawsuit, he or she cannot take the necessary steps to file Orders of Administrative Closing with the Michigan District or Circuit Court or notify the plaintiff creditor of its obligation to cease and desist collections.
If you are being garnished, your Michigan bankruptcy attorney may be able to recover some of your garnished wages or bank account funds once your case is filed.
Bankruptcy will at least temporarily halt an eviction lawsuit, as well as well as other types of administrative court proceedings.
Beyond those questions of the effectiveness of the bankruptcy process, it is important to tell your Detroit bankruptcy lawyer about ongoing lawsuits as they may affect the timing of the filing of your bankruptcy case.
Quite a lot of documentation must be gathered and turned over to your bankruptcy lawyer so that a proper Bankruptcy Petition can be drafted. Most Metro Detroit bankruptcy attorneys will require you to complete a lengthy questionnaire regarding your assets, debts, income, expenses, and other important items.
Do you have 3 months to get it all done at leisure? Or does the service of process you’ve just received from your creditor’s lawyer mean you’d better move a little faster?
Letting your lawyer know what’s going on will inform both of you as to what your deadline for filing actually is—before your wages are garnished in the first place.
What & How You Earn
What you earn is one of the most important things to tell your bankruptcy lawyer.
Your income is key in determining whether you are eligible to file for Chapter 7 bankruptcy. The income earned by you and other wage-earners in your household over the 6 months prior to the date of the bankruptcy’s filing is the key information utilized by the Chapter 7 Means Test.
As described in our Chapter 7 Means Test Article here, the Chapter 7 Means Test is the mathematical formula that determines whether or not you are eligible for Chapter 7 bankruptcy in Livonia, Detroit, Westland, or elsewhere in Michigan.
In Chapter 13 Bankruptcy, your income is also factored into the calculation of your monthly Chapter 13 Plan payment. The Chapter 13 versions of the Means Test also determines how much you must repay your creditors in your Chapter 13 process.
Why is the source of your income an important thing to tell your bankruptcy lawyer?
Some forms of income, such as Social Security Disability benefits, are not calculated in the Means Test at all.
Other forms of income, such as that earned from business ownership or operation, can make your bankruptcy vastly more complicated.
Business income is treated differently in bankruptcy depending on the type of bankruptcy you are filing and the legal structure of your business. This is especially true if you are the sole owner of a Michigan LLC or other corporate entity.
In that case, the question of whether or not your income is personal income or the income of the separate business entity must be considered by an experienced Livonia, Michigan bankruptcy attorney.
Contact a Livonia, Michigan Bankruptcy Lawyer Now
The bottom line is that there is a great deal of information you will need to share with your bankruptcy attorney.
By providing your bankruptcy lawyer with all of the necessary information about your financial situation, you can help ensure that your case is handled efficiently and effectively.
Remember to be honest and upfront with your lawyer, even if you are worried about how certain information may be perceived. Your lawyer is there to help you and to protect your interests, and they can only do this if they have a complete and accurate understanding of your situation. With the right support and guidance, you can successfully navigate the bankruptcy process and get a fresh start on your financial future.
Bankruptcy Attorney John Hilla has successfully represented hundreds of clients through Chapter 7 and Chapter 13 bankruptcy processes in Livonia, Detroit, Westland, Southfield, Dearborn, Redford, Farmington, Ann Arbor, Flint, Bay City, and virtually everywhere else in Michigan.
Offering free, virtual consultations and friendly, one-on-one service from Livonia bankruptcy attorney John Hilla, we will ensure that your matter is prosecuted properly, competently—and with kindness.
If you aren’t sure whether a debt that you owe will be dischargeable in bankruptcy, contact us to discuss.