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Brent Blanchard
Brent Blanchard, Bankruptcy Attorney
Category: Bankruptcy Law
Satisfied Customers: 1905
Experience:  Twelve years experience in all aspects of debtor & creditor BK.
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Hello - I have read all fed & Michigan state ch. 7 exemption

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Hello - I have read all fed & Michigan state ch. 7 exemption codes. (I won't pay if you direct me to a site or can't answer.) I need clarification now with very specific answers - otherwise I'll go to local attorney for consult on this question. I am completing papers now and am on Schedule C. Seems like federal rules are better (Mich allows both. Does this mean either / or? Or select from a state exemption and also use a fed one?) Need to complete forms and get file tomorrow at courthouse due to lawsuit hearing next Tuesday! Been working on all week but stuck on exemptions. Giving you a concise but dense picture of my situation. If you can answer this question, I'll pay. Thank you!

I'm filing ch.7 in Michigan on my own this week-single/no kids. Have judgment court date next Tues from creditor & need to inform them asap . Need help figuring out whether to use State or Fed Exemptions. Quick synopsis: Need to exempt SSDI disability income; SSDI lump sum 28000 paid 7 months ago-spent on surgery & home remodel; home - market value 135,000 -- 1st mortgage owed 146,000; Home Equity loan 46,000 -- upside down w economy but want to keep home--any way to get bank to cut loan other than redemption?; and a car -- blue book is 5K BUT is broke & repairs expected over 2,500. Worth 2,500 then to fit under fed guidelines?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Brent Blanchard replied 3 years ago.
Thank you for your question.

Federal law reigns supreme in bankruptcy for Social Security benefits. Those should be no problem, such income is exempt.

Re-affirming on any debt allows the Debtor to keep the collateral. Houses, cars, even big-screen TVs...so long as the "equity" is under the applicable exemption limit. If worth too much, the Trustee just requires a "payout" of the excess dollars for the benefit of other creditors.

Market value of a vehicle is what rules on Schedule C. Where I'm at, the Trustees prefer use of the NADA guide, but even that is supposed to take into account the condition of the vehicle. A nice written estimate of repair costs taken to the Section 341 Hearing can go a long way towards satisfying the Trustee that the value is accurate.

Dual-exemption states like Michigan require the Debtor to chose one or the other. No "mix and match" allowed.

A recent court decision (In re Schafer, B.A.P. Case No. 10-8030 (B.A.P. 6th Cir. 2011), said the MI BK-only exemption scheme is no longer allowed. So, make sure that your sources are up-to-date on the exemptions to be used (that's part of what attorneys pay for with BK paperwork preparation software--the updates are key). The decision was about a month ago, so BK Debtors can now use the exemption scheme at Mich. Comp. Laws §(NNN) NNN-NNNN OR the federal scheme.

Banks don't cut loan balances unless forced to. A "cram-down" in a Chapter 7 case is generally possible only for a 2nd mortgage, not for a first mortgage.

Thank you.

BAB.
Brent Blanchard, Bankruptcy Attorney
Category: Bankruptcy Law
Satisfied Customers: 1905
Experience: Twelve years experience in all aspects of debtor & creditor BK.
Brent Blanchard and other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.
Hello Brent,

Thank you so much for your clear reply. I will likely be going with federal exemptions. To be clear that I am citing the correct Title / statute, I am assuming that U.S. Courts.gov have the latest information. Is there more updated site to be sure I'm looking at correct exemption amounts?

(If I need you again, later today, will you be online? or tomorrow?) Thank you so much.

Kate
Expert:  Brent Blanchard replied 3 years ago.
Yes, uscourts.gov has the latest federal information.

I am definitely off-line for most of this evening, might be back very late. New questions are best in a new thread, but if you specifically want me, there should be an option on the Customer interface to give that particular Expert an exclusive "lock" on the question. It might be for only two hours--I haven't looked at that part of the site for a while. It also helps to put in the topic heading "For [Expert]:"

Thank you.

BAB.

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