Algonac, MI Bankruptcy Law Firms & Lawyers

As a general rule, if you have a pretty good credit score now, a bankruptcy will send it down by up to 100 points. As a comparison, if you have 5 accounts that are don?t get paid as required, you lose 10 points for each account every month, which is 50 points per month. In two months, not paying credit obligations is equivalent to bankruptcy. In addition, bankruptcy is a one time hit to your credit score, while settling debts may require month after month of not paying. Pay if you can, but if you cannot pay, file bankruptcy sooner rather than later to prevent massive damage to your credit score.

Attorneys frequently will not file a bankruptcy until they have received full payment from you. The reason is that the bankruptcy code does not give attorneys an exception; if you still owe money to the attorney after they file the bankruptcy case, then they actually become a creditor too! This can create a conflict of interest, and the attorney would be committing a discharge violation by attempting to collect from you. Some attorneys will separate their bills into "pre-petition" and "post-petition" work in order to facilitate payment plans for you, but it is not something I see very often. Another option may be filing a chapter 13 bankruptcy; while a more complex option, some attorneys will accept payments through the bankruptcy payment plan. This may or may not be feasible for you, though, depending on your circumstances.

Most Chapters will eliminate unsecured debt but which Chapter to file is not a function of debt but of equity. You need to consult with a qualified atty to find out what your equity would be in a bankruptcy proceeding so that you can determine the right Chapter to file under.