Late-Life Bankruptcies

A Growing Safety Net

By James Frego and Glen Turpening

At a Glance

The concept of a late-life bankruptcy is one that attorneys working with older clients need to become familiar with as a way of helping these at-risk individuals. Bankruptcy is becoming a bigger part of the social safety net for senior citizens where the old system of a secure, lifelong income is being replaced by permanent debt relief.
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Filing for Chapter 7 Bankruptcy In Michigan: Do You Need a Lawyer?

Every year, thousands of Americans find themselves drowning in debt and in need of filing for bankruptcy. Michigan residents often wonder if they can file bankruptcy on their own. To them, the idea of attorney’s fees seems out of the question. They think if they can take the attorney’s fees out of the equation, filing for bankruptcy would be a lot more doable. And to be perfectly clear, by law, you don’t need a lawyer to file for Chapter 7 bankruptcy. However, it is most definitely not recommended.

According to the United States Courts, “Individuals can file bankruptcy without an attorney, which is called filing pro se. However, seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes.”

While filing for bankruptcy on your own will save you money, it’s a very serious undertaking and it should not be attempted by someone who doesn’t know what they are doing. To give you an idea why, here are some of the steps you would have to undertake if filing alone.

Mean Test

When considering whether to file bankruptcy without a lawyer, the first step is to conduct a “Means Test” to determine whether you even qualify for Chapter 7 bankruptcy. You’ll have to answer questions about your income, your debts and assets, and the number of people in your household. The more income and assets you have, the more complicated this process can be.

Some debts you will have to continue to pay while some can be forgiven. This all requires legal knowledge.

Credit Report & Counseling

The next step is to obtain credit reports from all three credit bureaus. You’ll need all three reports because creditors don’t typically report to every bureau. If you fail to report a debt, it won’t be discharged in bankruptcy. Next, you’ll have to complete a credit management and financial literacy course. By law, consumers are required to take a test prior to filing bankruptcy. These can be completed online.

The Paperwork

Filling out the paperwork is generally the most complicated and time-consuming task facing people who choose to file bankruptcy without a lawyer. After you’ve completed all the forms, attached the relevant documents and submitted the paperwork, you’ll need to promptly respond to any correspondence from the bankruptcy trustee. Failure to do so can get your case dismissed.

Because some of the paperwork is so complex, there are also certified non-attorney petition prepares. These preparers fill out paperwork and submit in your behalf. This can be much cheaper than an attorney, but they are prohibited from answering any questions or giving legal advice. You must still know what information you need to provide to the non-attorney preparer so that that can fill out the paperwork completely.

You can view all of the bankruptcy paperwork here.

Meeting of Creditors

You’ll have to attend your “Meeting of Creditors” on the scheduled date, also known as a 341 hearing. Although your creditors won’t actually be present, the trustee will be and will ask you a number of standard questions about your case. The trustee’s job is to make sure that your creditors get paid as much as possible. Be sure to answer truthfully and accurately.

This all can be intimidating. An attorney can meet creditors with you and advise you throughout the way.

Personal Financial Management Instruction Course

Finally, you must complete a post-filing Personal Financial Management Instruction Course within 45 days of your meeting of creditors. After you’ve completed the course, you can finally take a breath and just to wait to hear whether your debts have been discharged.

Taxes After Bankruptcy

After Chapter 7 Bankruptcy, you will need to learn how to file taxes accordingly. This can be an entirely new hurdle. Some types of forgiven debt will need to be reported as such. The government sometimes considers forgiven debt as income, so it is important to have the financial know-how to file taxes with your new bankruptcy record.

If you’re like most people, you wouldn’t even know how to start the above processes. Which is normal – attorneys spend many years studying and applying their knowledge in order to have a full working understanding of the legal hurdles involved in bankruptcy. This is why we don’t recommend that anyone try to file for chapter 7 bankruptcy without a lawyer. You’ll want the person representing you to be someone who is trained to do so. When it comes to protecting you and your family from these tough problems… EXPERIENCE COUNTS!!!

Frego Law has Flint bankruptcy lawyers, as well as bankruptcy attorneys in Ann Arbor, Dearborn Heights, and Warren, Michigan.

To schedule a no-obligation visit with an attorney at any of our offices, please call (800) 978-4788 or fill out an appointment request online. The law is there to help you… and so are we!

*This article was updated for 2019

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How to Stop Foreclosure on Your Home

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What is a Chapter 7 Bankruptcy Case?

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What to Look for in a Bankruptcy Lawyer

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Different Types of Bankruptcies: Chapter 7 vs. Chapter 13


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What is Bankruptcy and What Can it Do For You?

From the earliest of times, lawmakers understood that sometimes bad things happen to good people and those people might need relief from their creditors. In the Old Testament book of Deuteronomy, Moses wrote: “At the end of every seventh year you must cancel the debts of everyone who owes you money” (see Deuteronomy 15:1). Eventually, the idea of allowing people to walk away from some or all of the debts they owe became known as “bankruptcy”. Here in America, the Founding Fathers also recognized this need and wrote at the very beginning of the U.S. Constitution that Congress shall have the power to establish “uniform laws on the subject of Bankruptcy throughout the United States”. Article I, Section 8. Continue reading…

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