Bankruptcy Myth: You'll Lose Everything

If you are faced with unbearable debt that you know you will never be able to pay and are considering filing for bankruptcy in Michigan, here are a few things you should know about bankruptcy:

You will not lose everything you have. Do not let this common misconception keep you from filing. The court is not going to sell everything you have and leave you on the street to start all over again.

Many of your assets are protected by the bankruptcy laws. This called an exemption. Certain assets such as your house, your car (up to a certain value), money in qualified retirement plans, household goods and clothing will not be taken form you, as they may be protected as an "exemption".

Most people pass through a bankruptcy case and keep everything they have. If you have a mortgage or a car loan, you can keep those as long as you are current and can keep making the payments, just as if you were not going through bankruptcy.

However Not All debts are wiped out in Chapter 7 bankruptcy. Although many debts can be "wiped out" in bankruptcy, certain types of debts cannot be discharged and erased. You cannot get rid of child support, alimony, government-issued or government-guaranteed student loans and debts incurred as the result of fraud. If you have been sued and there is a money judgment against you, it is not very likely that a bankruptcy judge will relieve you of this legal responsibility. If you have been ordered by a court to pay money to someone who sued you, then you cannot discharge the amount you have been ordered to pay, even if it was a settlement.

It is not difficult to file for bankruptcy. It is highly recommended that you have a Michigan bankruptcy lawyer to do the filing for you. It is well worth the cost because of the specific electronic filing requirements. The easy part for you is to get all your information to the attorney as soon as possible. The bankruptcy attorney will give you an information form to fill out and tell you exactly what you need and even how to get it. Make it a priority so that you are able to enjoy your "fresh start".