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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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My husband and I are looking into filing bankruptcy in Michigan.

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My husband and I are looking into filing bankruptcy in Michigan. Our income is about 24,000 a year and we have about 20,000 in debts. is there a way to file that we can still keep our assets like house, car and 401k?

cfortunato : Hi - my name is XXXXX XXXXX I'm a Bankruptcy attorney here to assist you.
cfortunato : 1) Have you and your husband lived in Michigan for at least 2 years?
cfortunato : 2) What is the current market value of your home?
cfortunato : 3) What is the balance owed for any mortgages and/or home equity loans for your home?
cfortunato : 4) What is the market value of your car?
cfortunato : 5) What is the balance owed for any car loan for your car?
Customer: 1. yes 2. we have 2 houses, one about 100,000 and the other 75,000 3. first house 88,000 second house 75,000. 4. about 3,000 for both cars. 5. no loans on cars
cfortunato : Thank you for your response.
cfortunato : Which house is your main residence?
Customer: the more expensive one
cfortunato : That is good, because you are allowed to keep a home with up to $35,300 equity.
cfortunato : (Equity is the market value of the home minus the balance on the mortgage.)
cfortunato : You will also be able to keep the $75,000 house, because it has no equity.
cfortunato : And you will be able to keep your cars, because they are worth less than $3,250.
Customer: ok. what about 401k
cfortunato : 401K plans are exempt (protected), which means you will also be able to keep your 401K.
cfortunato : Regardless of how much money is in the 401K account.
Customer: ok. so how does this work exactly? are the debts just gone or do they need to be repaid on a payment plan? I don't know much about bankruptcy
cfortunato : When you file a Chapter 7 Bankruptcy, your debts are discharged without having to pay anything.
cfortunato : If you file a Chapter 13 Bankruptcy, you have to make monthly payments to the Bankruptcy court for up to 5 years.
cfortunato : Given the information you provided, you would be able to file a Chapter 7 Bankruptcy - so that you would not have to make payments.
cfortunato : In general, one cannot file a Chapter 7 if their income is too high.
cfortunato : But your income is low enough to allow you to file a Chapter 7.
Customer: i thought of you filed chapter 7 you lost all of your assets
Customer: ?
cfortunato : Not completely! If you file a Chapter 7 Bankruptcy, you are allowed to keep some or all of your assets.
cfortunato : You are always allowed to keep at least some of your assets. And if you have limited assets, as you do, then you are allowed to keep all of your assets.
Customer: thank you
cfortunato : You're welcome!
cfortunato : But before you leave, please don't forget to provide a positive rating for my help.
cfortunato : Thank you!
cfortunato and 3 other Bankruptcy Law Specialists are ready to help you