Bankruptcy may be a great option if you are struggling to keep up with mortgage, credit card or other types of payments. Depending on the circumstances of your case, it may be possible to eliminate debts without losing a Michigan home, funds in a bank account or other assets.
You might keep your car
If your car has little to no equity, the trustee overseeing your Chapter 7 case is unlikely to seize it. It may also be possible to keep your car in a personal bankruptcy proceeding if you can show that you need it for work, school or other purposes. If you do have equity in the car, it may be possible to keep it by using one of the exemptions that may be available to you under state or federal law.
Stay current on payments
You must remain current on any upcoming loan or lease payments to retain your car in bankruptcy. Otherwise, whoever services your loan or lease may ask the court for permission to seize it. If the court believes that you can’t make payments in a timely manner, it may lift or suspend the automatic stay to allow the car to be repossessed. However, you may be given a chance to reaffirm the loan and make arrangements to catch up on any payments that are more than 30 days late.
Filing for bankruptcy may be an ideal way to discharge debts without losing assets. It may also put a stop to creditor phone calls, letters and other collection activities until your case is resolved.