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Paul Slough
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Entries in michigan bankruptcy (8)

Saturday
Apr102010

What's Been Keeping Me Busy

DateSaturday, April 10, 2010 at 3:42PM

I've been kept very busy over the past month, so I apologize for the lack of new blog posts or additional consumer information.

What's been keeping me busy?  A year ago I was appointed to a criminal public defense case, which went to trial in March.  Although I normally focus only a consumer cases and bankruptcy, this case was an exception.  It was a two week ordeal, ending in a mistrial which you can read about here.

Additionally, I've been busy helping my friend Ken Borton defend charges from the Michigan DNR(E) that his bird feeders violate Michigan's deer and elk feeding ban.  Ken runs the popular website www.snowmancam.com.  I've been working with Ken for over a year to deal with this issue and, although it's another criminal case I wouldn't normally take, I felt this issue was important enough to justify the exception.  Yesterday we received a favorable ruling dismissing the charges, which you can read about at the following links: here, and video here.

In addition to all that, March was a busy month getting bankruptcies filed and assisting clients with consumer issues.  April will be just as busy, doling out advice, filing bankruptcies, and attending ICLE's bankruptcy conference in Plymouth.  I'm also looking forward to the ABI Central States Workshop in Traverse City in June.  

Fortunately, I like being busy.  Technology allows me to continue servicing clients even when I'm travelling or otherwise outside my office.  I don't divert calls to a secretary, so people can reach me directly and I can access voice messages promptly (being in court is the rare exception).  I offer consultations after-hours and by phone to facilitate work and family schedules.  I make extensive use of email and the Internet to prepare cases.  And I offer flat fees, so all of this comes as part of the package.

If you're facing a consumer issue or mounting debt,  I'm never too busy to do my best for you: send me an email or pick up the phone.

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Wednesday
Mar032010

Collection Lawsuits in Michigan (Part I)

DateWednesday, March 3, 2010 at 8:46PM

The creditors have been calling, but no matter how much you pay it's not enough to stop them. You start ignoring the calls and the threatening letters.  What happens next?

The creditor will sue you to get a money judgment.  Why?  Because a judgment is good for ten years and Michigan law gives the holder of a money judgment a set of tools to force you to pay.  These include bank account and paycheck garnishments, levies, creditor exams, and liens.  Sometimes a creditor will sue you before they even entertain a settlement offer.


But don't panic if a creditor sues you.  The creditor cannot use these tools until a judgment is obtained. To get a judgment, the creditor must file and serve you with the complaint.  If you're served by mailed, you then have 28 days to answer. After that, the creditor must apply for a default judgment, and then wait another 21 days for it to become effective. If you answer the complaint, you can buy more time as the court will set the matter for a pretrial.  

That said, don't wait for the creditor to get a judgment.  A timely bankruptcy filing will halt or prevent litigation.  It can discharge your debt before the garnishments start or the liens get placed on property.  It can even get back some of your recent garnishments and strip off liens, but this can result in a more complicated and expensive bankruptcy filing.

 

In my next post, I'll address some of the tools creditors use once they obtain their judgments
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Saturday
Jan162010

Your Small Business in Your Personal Bankruptcy

DateSaturday, January 16, 2010 at 11:18PM

If you own or operate a small business and are considering filing a personal bankruptcy, there are a few things you should be aware of.  

First, the existence of the business will complicate things.  Most attorneys will charge more for your bankruptcy because it will take more time to prepare the filing and administer the case.

Second, your interest in the business is an asset.  Even if the business is a separate entity, like a S-corp or C-corp, and owns all the equipment and debt, you still own the stock.  And the stock has a value, directly tied to those assets and debt.  The trustee will want to know what that interest is worth.  To establish that, you'll have to provide tax returns for the business (if it's separate from your personal returns), a profit and loss statement, and a list of assets and recent transfers for the business.  If you don't already have a good accountant, get one.

Also, keep in mind that a personal bankruptcy filing will discharge your personal liability the business debts, but it won't discharge a corporation or limited liability company unless it too files a chapter 7.  The corporation does, however, have the ability to fold up or take other state law action to liquidate its assets.

Finally, be aware that certain personal business debts, like "trust fund taxes" incurred by failing to pay employee withholding tax or sales tax, will not be discharged.

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Wednesday
Dec092009

What is the difference between secured and unsecured debt?

DateWednesday, December 9, 2009 at 10:29AM

Lawyers like to use really fancy words, especially bankruptcy lawyers.  My favorite term is "executory contract" (an unperformed contract) because it's a term which even confuses other lawyers.

When discussing bankruptcy you'll hear the terms "secured" and "unsecured," often in reference to a creditor or debt.  Like most fancy terms, these have simple meanings.

A secured debt is a promise to pay where the creditor holds a lien on some property to ensure payment.  It's usually a home or car, but could be other personal property like a motorcycle or TV.  That creditor is called a secured creditor, and if the creditor is not repaid as promised, the creditor can undertake certain state remedies to take the property and credit the property's value towards the outstanding balance.

An unsecured debt is the opposite of a secured debt.  That is, it's a promise to pay without any liens on property.  This includes things like credit card debt, medical bills, or simple promissory notes.

The reason this is important is because bankruptcy discharges your personal obligation to repay a debt. With only a few exceptions, it does not discharge a lien on property.  This means you have to deal with a secured creditor in one of five different ways, which I'll cover in a later post.

It's important to note that some creditors can become secured.  Creditors like the IRS or State of Michigan often place "tax liens" on personal property or land, which makes their unsecured tax debt a secured debt.   Other creditors can do this as well once they obtain a judgment.

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Wednesday
Oct282009

Preferential Transfers: What are they and how to avoid them.

DateWednesday, October 28, 2009 at 10:00PM

A few weeks ago I published an article explaining what preferential transfers are, how to avoid them, and what to do if you're sued by a trustee because of a transfer.

You can read the article here.

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