Q:

Will I lose my house if I file bankruptcy?

A:

In most cases, no. Under the Federal exemption scheme, you may protect up to $26,475 in equity in your home. Under the Michigan exemption scheme, you may protect up to $38,225 if you are under 65, or $57,350 if you are at least 65 or disabled. In some cases, under the Michigan exemption scheme you may be able to protect 100% of the equity in your home. You must, however, be current in your monthly mortgage payments when you file bankruptcy and then continue to make your mortgage and property tax payments after you file.

Q:

My mortgage is in foreclosure. May I save my house?

A:

You may be able to save your house by filing Chapter 13 bankruptcy. Chapter 13 allows you to pay off the past due balance you owe by making monthly payments over several years. However, you must file Chapter 13 before the Sheriff’s Sale is held.

Q:

Will I lose my car/truck if I file bankruptcy?

A:

It depends on the value of your vehicle, and if you’re current on any loan that you owe for the vehicle. Under the Federal exemption scheme, you may protect up to $4,000 of equity in one vehicle. Under the Michigan exemption scheme, you may protect up to $3,525 of equity in one vehicle. If you are current on your loan and file Chapter 7, you can enter into an agreement with your loan company to keep the vehicle. If you are not current on your loan, you may lose your vehicle in Chapter 7. If you file Chapter 13, you may be able to modify your loan and the payment terms. In either Chapter 7 or Chapter 13, if you do not want to keep your vehicle you can surrender it and in most cases you will discharge the debt.

Q:

I lease my car/truck. How does bankruptcy affect my lease?

A:

If you wish to keep your leased vehicle, you may enter into an agreement with your lease company after you file bankruptcy. But, your payments must not be late when you file bankruptcy, and you must continue make your monthly payments. If you do not want to keep your leased vehicle, you can surrender it after you file bankruptcy and in most cases you will discharge the debt.

Q:

What happens to my wages in bankruptcy?

A:

In a Chapter 7 bankruptcy, you may generally keep all wages that you earn after you file. In a Chapter 13 bankruptcy, your wages are used to fund your payment plan.

Q:

I receive child support. Will I lose it if I file bankruptcy?

A:

No, you will not.

Q:

I have a credit card that I would like to keep after I file Chapter 7. May I?

A:

Unfortunately, you may not. You are obligated to list all of your creditors when you file for bankruptcy. Once you file Chapter 7, credit card companies will cancel all of your cards, even if you currently do not owe a balance on a credit card.

Q:

What happens to lawsuits when I file bankruptcy?

A:

Most lawsuits stop when you file bankruptcy. Generally, you are able to discharge any debt that you are claimed to owe in the lawsuit.

Q:

What is a discharge under bankruptcy law?

A:

The goal of filing bankruptcy is to obtain a discharge. A discharge prevents your creditors from continuing to sue you or filing new lawsuits against you. It also prevents creditors from trying to collect on any judgments that they have obtained against you. Your creditors will no longer be able to garnish your wages or bank accounts, or seize any of your property. If they attempt to do so, you may be able to bring an action against them and the court may award you costs and sanctions.

Bernardi, Ronayne & Glusac, P.C., is a debt relief agency located in Plymouth, Michigan. Among other services, we help people file for bankruptcy relief under the U.S. Bankruptcy Code.