By the time most clients walk through our door, they have tried everything else. They have negotiated, moved balances, and skipped meals to make a minimum payment that barely moves the principal. Bankruptcy is not failure. It is a legal tool, written into our country's earliest laws, that exists for exactly this moment. We use it the way it was meant to be used: to stop the bleeding, protect what matters, and give you a real path forward.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
When bankruptcy is the right tool, and when it isn't
Bankruptcy is not the answer to every debt problem, and a good attorney will say so before you sign anything. It tends to be the right tool when your debts have outgrown what any reasonable budget can repay within a few years. It is often the right tool when a foreclosure sale, wage garnishment, bank levy, or repossession is moving faster than you can. It is the wrong tool when the hardship is temporary and a tighter budget will get you through, or when settlement, a debt management plan, or a consolidation loan can do the same job with less impact. Many of our consultations end with a recommendation not to file. Hundreds of thousands of working people file each year, almost always because of a job loss, a medical event, a divorce, or a small business that did not work out. There is no judgment in this office, only the question of what gets you back on solid ground fastest.
| Feature | Chapter 7 (Liquidation) | Chapter 13 (Reorganization) |
|---|---|---|
| How long it takes | A few months | Three to five years |
| Who it fits | Filers who qualify under the income rules | Filers with steady income who need a structured plan |
| What happens to debts | Most unsecured debt wiped out at discharge | Repaid in part through a plan; remainder discharged at the end |
| Behind on the mortgage | × Cannot cure arrears on its own | ✓ Can cure arrears and keep the home |
| Property you want to keep | Protected up to legal limits | Keep all assets; pay equivalent value through the plan |
| Recent taxes and back support | Limited treatment | Can be paid through the plan |
| Best when | Limited income, primarily unsecured debt, no major assets at risk | Steady income, behind on a mortgage, or assets to protect |
| Credit report duration | Up to 10 years | Up to 7 years |
Chapter 7 (liquidation)
Chapter 7 is what most people picture when they think about bankruptcy. It is a relatively short proceeding, usually a few months from filing to discharge, in which most unsecured debts are wiped out and you keep the property the law lets you protect. It is available to filers whose income falls within the rules, and many who think they will not qualify actually do once we look at the full picture. Debts commonly wiped out include credit cards, medical bills, personal and payday loans, deficiency balances after a repossession or foreclosure, old utility bills, and most consumer judgments. After filing, you attend a brief meeting with a court-appointed trustee, and the discharge order follows soon after.
Chapter 13 (reorganization)
Chapter 13 is a reorganization. You make a single monthly payment to a trustee under a three to five year plan, and at the end any remaining qualifying unsecured debt is discharged. Chapter 13 is often the right tool when Chapter 7 does not fit your income, when you are behind on a mortgage and want to catch up while keeping the home, when you have property you would lose in a Chapter 7, or when you owe priority debts like recent income taxes or back support that need a structured way to be paid. The plan payment is built around what your budget can realistically support after necessary living expenses. In many plans, unsecured creditors receive only a small share of what they were owed.
When you file: immediate protection
The moment your case is filed, a court-ordered protection takes effect that stops nearly every form of collection activity. Foreclosure sales (including sales scheduled for the same day), wage garnishments, bank account levies, vehicle repossessions, collection lawsuits, and the daily collection calls all stop. This protection is automatic and does not require a separate motion. Once we file, we notify your creditors with the case number, and the calls stop quickly. For clients who come in with a foreclosure sale on the calendar or a fresh garnishment hitting the next paycheck, we routinely file the same day or the next morning. The protection has narrow limits (it does not reach criminal proceedings or ongoing child support collection), but for the vast majority of consumer cases it is broad and immediate.
What you keep
Bankruptcy is not designed to leave you with nothing. The law protects categories of property so you can rebuild a normal life on the other side. In a typical case, that includes substantial equity in your home, equity in a vehicle, ordinary household goods and clothing, the tools you use to earn a living, retirement accounts, public benefits, and Social Security. There are limits, and they vary, but most of our clients keep everything that mattered to them going in. We walk through your full asset list before filing so you know exactly what is protected.
What bankruptcy does not wipe out
Bankruptcy is powerful but not unlimited. Some debts generally survive a discharge:
- Most student loans, federal and private, unless a court finds undue hardship under the standards courts apply.
- Recent income tax debt. Older income tax debt sometimes can be wiped out; recent tax debt usually cannot. Withheld payroll taxes are never wiped out.
- Child support and spousal support.
- Criminal fines and restitution.
- Debts arising from fraud or willful and malicious injury, where a creditor proves the elements in court.
We map your debts against this list in the consultation so you know exactly what will and will not go away.
Bankruptcy and your home
Saving the family home is one of the most common reasons clients come in. In Chapter 7, filing immediately stops a pending foreclosure sale, and if you are current on the mortgage you can keep the home as long as you keep making the regular payment. Chapter 7 may delay a foreclosure if you are behind, but it does not give you a tool to catch up on missed payments. Chapter 13 does. Under a Chapter 13 plan, you cure the missed mortgage payments over the life of the plan while keeping the regular monthly payment current going forward. The lender cannot foreclose during the plan as long as you stay current on both. For homeowners who fell behind during a job loss or medical event and whose income has since recovered, Chapter 13 is often the difference between keeping and losing the home.
Credit and recovery after bankruptcy
The myth is that bankruptcy ruins your credit forever. In our experience the damage from not filing when you needed to (late payments, judgments, charge-offs piling up year after year) is often worse than the damage from filing. After discharge, most clients see their scores begin to recover within three to six months because the underlying delinquencies are finally resolved. Most qualify for ordinary auto financing within roughly one to two years, and for FHA, VA, or conventional home financing within two to four years, especially when the rebuild is done deliberately. We send every client home with a written rebuilding roadmap.
Alternatives to bankruptcy
We talk through the alternatives in every consultation, even when bankruptcy looks like the obvious answer. The most common are direct negotiation with creditors (a lump sum settlement, often a fraction of the balance, when funds are available), debt management plans through reputable nonprofit credit counseling agencies, and consolidation loans for clients whose credit is still strong enough to qualify. We are openly skeptical of for-profit "debt settlement" companies: the math often does not work, the tax consequences are real, and lawsuits often arrive before the savings do. For some clients with no garnishable wages and no real assets, the practical answer may be to do nothing at all and rely on the protections that already exist for that situation.
What it costs
For most Chapter 7 cases we quote a flat fee, paid in full before filing, that covers the petition, the meeting with the trustee, and routine post-filing work through discharge. Court and course fees are separate and modest. Chapter 13 is different: a smaller down payment starts the case, and most of the attorney fee is paid through the plan rather than out of pocket. We confirm pricing in writing after the consultation, and we never start work without a signed engagement and a clear scope.
Our process for bankruptcy clients
- Discovery (free, about an hour). Income, assets, debts, and goals; a preliminary look at which chapter (if any) fits; a clear recommendation.
- Recommendation and scope. Written scope, timeline, and fee structure within one business day.
- Document gathering. Pay stubs, tax returns, bank statements, creditor list. We keep the checklist short.
- Required pre-filing course. A short online course completed before we file.
- Petition preparation and filing. We draft, you review, we file.
- Meeting with the trustee. We attend with you; brief and almost always uneventful.
- Required second course and discharge. A second short online course, then the discharge order.
- Aftercare. A written close-out memo, a rebuilding roadmap, and a standing invitation to call us if a creditor tries to collect on a wiped-out debt.
A full review of your situation, an honest answer about whether bankruptcy is the right tool, a clear sense of which chapter fits, and a written quote within one business day if it does. No obligation, nothing to pay.
Common mistakes we see
- Draining a retirement account to pay creditors before filing. That money was protected; the debt was about to be wiped out anyway.
- Transferring property to family before filing. Trustees look for these transfers and routinely unwind them.
- Running up credit cards right before filing. Last-minute charges and cash advances are often treated as non-dischargeable.
- Filing without thinking about timing. Sometimes a short delay produces a much better outcome.
- Trying to leave a creditor off the list. Every creditor must be listed, and unlisted debts may not be discharged.
- Hiring a petition preparer rather than an attorney. Preparers cannot give legal advice or appear with you.
Frequently asked questions
Is bankruptcy the right tool for me?
Bankruptcy is a legal tool, not a verdict on you. It tends to be the right tool when your debts have outgrown what any reasonable budget can repay, or when a foreclosure, garnishment, or lawsuit is moving faster than you can. It is often the wrong tool when the hardship is temporary or when settlement, a debt management plan, or simply reorganizing your budget can get you there. We will tell you honestly which one fits.
Will I lose my house and car if I file bankruptcy in Michigan?
In most consumer cases, no. The law protects substantial home equity, vehicle equity, household goods, and retirement accounts. As long as you keep paying on a secured loan you want to keep, the lender's lien continues but your personal liability is wiped out. We walk through what is protected before filing.
What is the difference between Chapter 7 and Chapter 13?
Chapter 7 is a short proceeding that wipes out most unsecured debt for filers who qualify. Chapter 13 is a three to five year repayment plan that can save a home from foreclosure, protect assets, and handle priority debts like recent taxes or back support. Which one fits depends on your income, your goals, and what you are trying to protect.
What debts does bankruptcy not wipe out?
Most student loans (federal and private) generally survive, unless a court finds undue hardship. Child support and spousal support continue. Recent income tax debt usually survives, though older tax debt sometimes does not. Criminal fines and restitution survive, and so do debts a court finds were obtained by fraud or willful, malicious harm.
How long does bankruptcy stay on my credit report?
Chapter 7 reports for up to ten years from filing; Chapter 13 for up to seven. The practical impact is much shorter. Most clients qualify for ordinary auto financing within a year or two and a home mortgage within two to four years.
Will bankruptcy stop a foreclosure or wage garnishment?
Yes. The day we file, a court-ordered protection takes effect and stops nearly all collection activity, including foreclosure sales, garnishments, levies, repossessions, and lawsuits. When time is short, we can file emergency petitions the same day a sale or paycheck is at risk.
Will my employer find out if I file bankruptcy?
Filings are public records, but employers are not notified by the court and rarely look. Narrow exceptions exist for jobs requiring security clearances or financial-sector licensing. Federal law also prohibits private employers from firing you for filing.
How much does bankruptcy cost in Michigan?
For most Chapter 7 cases we quote a flat fee, paid in full before filing, plus court and course fees. Chapter 13 attorney fees are largely paid through the plan rather than up front. We confirm pricing in writing after the consultation.
Ready for an honest conversation?
If creditor calls, garnishments, or a foreclosure are running your life, the first step is a consultation. You will leave with a clear picture of your options and a written quote if you want to proceed.