Michigan Bankruptcy Attorney and Legal Services

Bankruptcy Basics

Your debt is not unique

If you are in facing financial difficulties and overwhelming debt and are reluctant to consult with a lawyer about filing for bankruptcy in Michigan (including Chapter 7 Bankruptcy and Chapter 13 Bankruptcy), you are not alone. Many people just like you have found themselves in a similar situation. You might be relieved to learn that the nature of the economy is often the predominant factor in debt, credit, and financial difficulties rather than the way an individual manages his or her debts.

A fresh start

One of the main goals of the federal bankruptcy laws enacted by Congress is to give debtors a financial “fresh start” from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision:

“ [I]t gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt. “ (“The Process”, http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html)

Famous people

If you are considering consulting with a lawyer about filing for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy in Michigan to relieve your debt situation but are reluctant to do so because you fear bankruptcy carries a negative stigma, perhaps you would find it interesting to learn about some famous people who have also filed for bankruptcy and have actually had financial success after doing so.

Consider these famous people who have found themselves in a similar position to that of your debt situation, many due to circumstances beyond their control:

Henry Heinz (1844-1919), founded the H.J. Heinz Company, the most global U.S.- based food company. Mr. Heinz started his company in 1869 and in 1875 was forced to file for bankruptcy because a bumper crop that year meant that his company could not cover its payroll. Just after he filed for bankruptcy, Mr. Heinz started a new company and introduced a new product, ketchup, to the market. This new company was very profitable from its beginning to the present day.
Walt Disney (1901-1966), animator, filed for bankruptcy in 1920 after a main client of his had filed for bankruptcy. Because of this, Mr. Disney could not cover payroll and rent. In 1923 after obtaining a loan from his parents and his brother, Mr. Disney started a new company and created Mickey Mouse in 1928.
Donald Trump, (1946- ), businessman, filed for bankruptcy in 2004 for his casino business for the second time (the first was in 1992) after negotiations with his creditors failed. Mr. Trump filed for bankruptcy to reorganize his casino business.
Dorothy Hamill, (1956- ), former Olympic ice skating champion filed for bankruptcy in 2004 after she was sued for repayment of a bank loan that had been used to finance an Arizona ice skating arena that later went bankrupt.
Milton Hershey (1857-1945), Hershey’s chocolate founder, filed bankruptcy after starting four candy companies that failed. Mr. Hershey then went on to start what is now known as Hershey’s Foods Corporation.
Lorraine Bracco, (1954- ), actress in the HBO hit The Sopranos. Ms. Bracco fought a five-year legal battle with ex-Harvey Keitel over custody of their daughter Stella. Because of legal fees and taxes Ms. Bracco filed for bankruptcy in 1999. The popularity of The Sopranos helped her dig herself out of debt after she filed for bankruptcy.

What Kind Of Bankruptcy Do I need in Michigan?

The two kinds of bankruptcy that are most commonly chosen in Michigan are Chapter 7 and Chapter 13. Here is a brief description of each of these kinds of bankruptcy:

Chapter 7

Chapter 7 is Individual Liquidation. Chapter 7 Bankruptcy takes away assets and debts so that an individual may “start over”. More details about Chapter 7 Bankruptcy… (Make hyperlink to CHAPTER 7 BANKRUPTCY page)

Chapter 13

Chapter 13 is Individual Reorganization. This is an attempt to reorganize debt. The individual who files for Chapter 13 Bankruptcy is put on a payment plan to reduce debt. More details about Chapter 13 Bankruptcy…

Will Filing Bankruptcy Stop my Foreclosure In Michigan?

Individuals may use a Michigan Chapter 13 Bankruptcy proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the Chapter 13 Bankruptcy petition. The individual may then bring the past-due payments current over a reasonable period of time. Nevertheless, the debtor may still lose the home if the mortgage company completes the foreclosure sale under state law before the debtor files the petition. The debtor may also lose the home if he or she fails to make the regular mortgage payments that come due after the Chapter 13 Bankruptcy filing.