Category Archives: Bankruptcy/Debt

Pros and Cons of Bankruptcy

Advantages of bankruptcy:

  • One of the most important advantages of filing for bankruptcy is that debtors may obtain a fresh financial start.
  • If you are eligible for Chapter 7 you may be forgiven (discharged from) most unsecured debts. A secured debt is one which the creditor is entitled to collect by seizing and selling certain assets of the debtor if payments are missed, such as a home mortgage or car loan.
  • You may be able to keep (that is, exempt) many of your assets, although state laws vary widely in defining which assets you may keep.
  • Collection efforts must stop as soon as you file for bankruptcy under Chapter 7 or Chapter 13.
  • You cannot be fired from your job solely because you filed for bankruptcy.

Disadvantages of bankruptcy:

  • A bankruptcy can remain on your credit record for 7-10 years and can affect your future finances.
  • A bankruptcy may impede your chances of getting a mortgage or car loan for some time.
  • Not all debt will be discharged. Some debt that cannot be discharged is child support, alimony, some student loans, divorce settlements and some income taxes. You should check with an attorney on the specific categories of debt that will be allowed for discharge.

If you are looking for an attorney to guide you through the bankruptcy process contact David Lutz at 248-624-5500 or visit our website



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Michiganders Can’t Live On Minimum Wage

For everyone out there who feels like they’re slaving away each day at their job yet still racking up credit card debt, missing monthly payments and always driving with an empty gas tank it’s not your fault.

Working harder and longer may not be enough to support a family in Michigan, particularly for employees in low-paying jobs such as retail sales, clerical work and home health care, according to a new study released today.

The Basic Economic Security Tables for Michigan, a study that analyzes the cost of essential needs for singles and families across Michigan, found the cost of providing basic necessities — such as shelter, food and transportation — far exceeds minimum wage and the paychecks of people working full-time in low-paying job categories.

Read the full article here 

If you are having a hard time paying your debts and considering Bankruptcy call our experienced Bankruptcy attorney David Lutz at (248) 624-5500

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Think Before You Charge: Credit Cards And Non-Dischargeable Debt

Running up your credit cards prior to filing bankruptcy in Michigan ( in anticipation of filing ) may be considered fraud and cause your debt to be non-dischargeable.

Buying luxury items such as a new flat screen, jewelry or even an Ipad can be presumed to be fraudulent and therefore nondischargeable: if: (a) a consumer incurs a debt to any single creditor totaling $500 for luxury goods or services incurred within 90 days before the filing; and, (b) cash advances on credit card obtained within 70 days before the filing are also presumed to be nondischargeable.

Check with your attorney concerning large amounts of credit card debt incurred for “luxury goods” right before your bankruptcy.

The banks themselves may also file for “Adversary proceedings in bankruptcy court” to contest the dischargeability of these debts. Therefore, you may end up being liable on these fraudulent debts despite the bankruptcy filing; and, worse, may also result in having your bankruptcy case dismissed.

The bottom line – as tempting as it may be to max out your credit cards before you file- DON’T

If you have questions concerning bankruptcy contact David Lutz at (248) 624-5500

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Number Of College Students Filing For Bankruptcy Grows

It is sad, but it is not surprising. People in their early twenties, many of them university students, are among the fastest growing group of bankruptcy filers in Michigan and in the United States. Teens are getting credit cards at younger  ages and many don’t know how to handle the responsibility. On top of student loans many college students find themselves relying on credit cards to pay their bills during college. Many don’t work full-time jobs and have little savings when they finish school.  The average college student has about $4000 in credit card debt after graduation.

Remember that credit card debt can make it more difficult to secure Graduate School loans.

Also remember that if you choose to file bankruptcy most student loans cannot be discharged.

If  you have questions about filing for bankruptcy contact David Lutz at (248) 624-5500 or visit our website

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Mortgage Mess: Who Really Owns Your Mortgage

Do you know who really owns your mortgage? As Scott Pelley reports on “60 Minutes” this week, that question has become a nightmare for many homeowners since the invention of mortgage-backed securities. Yes, those were the exotic investments that sparked the financial collapse in this country. And the’re still causing problems.

As it turns out, Wall Street cut corners when it bundled homeowners’ mortgages into securities that were traded from investor to investor. Now that banks are foreclosing on people, they’re finding that the legal documents behind many mortgages are missing. So, what do the banks do? As Pelley explains in this video, some companies appear to be resorting to forgery and phony paperwork in what looks like a nationwide epidemic.

Even if you’re not at risk of foreclosure, there could be legal ramifications for a homeowner if the chain of title has been lost. Watch the “60 Minutes” report and listen to Pelley’s discussion with “60 Minutes Overtime” editor Ann Silvio about the findings of his reporting team.

Read the full story on here

If you have questions about bankruptcy or foreclosure visit our website or call David at (248) 624-5500

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All You Need To Know About Credit Counseling Before Filing Your Michigan Bankruptcy

Before filing bankruptcy in Michigan, you must undergo credit counseling. You must also take credit counseling after you file. These classes are mandatory and there are no exceptions. You must also pass a means test and there are two major kinds of bankruptcy to consider.

Pre Bankruptcy Counseling

You must take a credit counseling course within six months of filing. This course must be one that is approved by the state. It is best to have your credit report with you when you take the training. If not, you will need a list of all of your debts. ou must file a certificate of credit counseling completion when you file for bankruptcy, and evidence of completion of debtor education after you file for bankruptcy – but before your debts are discharged. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates. To protect against fraud, the certificates are produced through a central automated system and are numbered.

Post Bankruptcy Counseling

This training must be taken before your case can be discharged. It may be best to take the training as soon as possible, after filing for bankruptcy. If you do, it may make things a little easier for your trustee at the hearing.

Means Test in Michigan

Due to 2005 regulations, a means test must be passed to file for Chapter 7 bankruptcy. Your income must be below the median income in the state (for six months prior to your filing). However, in some cases, people may be able to file if they meet other qualifications.

Chapter 7 or Chapter 13

If you do not qualify for a Chapter 7, you may be able to file a Chapter 13. Chapter 13 bankruptcies are not as restrictive as Chapter 7 bankruptcies. This is due to the fact that you are repaying many debts in a chapter 13 and in Chapter 7, most debts are being discharged or cleared.


Before filing for bankruptcy in Michigan, credit counseling classes must be taken. You must also take classes after you file. You will have to pass a means test to see if your income qualifies for Chapter 7. If not, you may be able to file for Chapter 13. In Chapter 7, debts are erased and it is harder to qualify for. Chapter 13 allows for debt repayments and is easier to qualify for. There is a lot to consider and some laws are difficult to understand. Hiring a bankruptcy attorney will make things much easier for you.

It is important to know the steps you must take before filing for bankruptcy.  If you have any questions on the process please contact David Lutz at (248) 624-5500

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All You Need To Know About Co-Signing A Loan: Should You Co-Sign

Many borrowers, be they cosigner or primary borrower (also known as the maker), don’t recognize the magnitude of the responsibilities borne by cosigning a loan.  Even it is not delinquent, a cosigned loan is part of your credit history.  Before making a decision whether to cosign a loan, consider the following advice offered by Experian, formerly TRW:


ü As a cosigner, you should know the purpose of the loan, the type of loan, the terms and why your friend or relative needs a cosigner.

Understand your legal and financial obligations. Federal law requires financial institutions to tell you in writing that you are responsible for paying the debt if the primary borrower can’t or won’t make loan payments.

-Read and understand the credit contract. Be aware that a lender may be able to collect from you even when there is collateral. In the case of a car loan, for example, the lender might demand payment from you instead of repossessing the car. And even if the car is repossessed, its value may not be sufficient to pay off the loan.

-If the primary borrower defaults on the loan, then you as the cosigner may have to pay late fees or collections costs in additions to the loan amount.

To read the full article

Ambrose Law Group

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All You Need To Know About Co-Signing A Loan: How might a co-signed loan affect your ability to get new credit?

Many borrowers, be they cosigner or primary borrower (also known as the maker), don’t recognize the magnitude of the responsibilities borne by co-signing a loan.  Even it is not delinquent, a cosigned loan is part of your credit history.   Since financial institutions consider a cosigned loan your responsibility, they’ll include it when calculating your debt-to-income ratio.

This ratio helps lenders judge whether you have too many bills to pay relative to your income. The cut-off point varies widely among financial institutions and the type of loan. If it’s too high, though, the result is the same: you loan application will be denied — even when the primary borrower never misses a payment on the cosigned loan.

To read the full article

Ambrose Law Group 248-624-5500

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All You Need To Know About Co-Signing A Loan: What Are Your Responsibilties As A Co-Signer?

Many borrowers, be they cosigner or primary borrower (also known as the maker), don’t recognize the magnitude of the responsibilities borne by cosigning a loan.

Cosigners lend their names and good credit histories to the maker. Should the maker die, lose a job or otherwise fail to make payments, all responsibility for meeting the terms of the loan transfers to the cosigner.

An often-overlooked aspect of cosigning a loan is the fact that the loan appears on both the maker’s and cosigner’s credit reports.  If the maker doesn’t pay, the lender will notify you to make the payments. In most cases, however, your credit report already will contain the delinquency by the time you receive this notification.

To read the full article

Ambrose Law Group


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Who’s King? Cash or Credit?



It’s now common for shoppers to slap down their credit or debit card for something as small as a cup of coffee or a pack of gum. But some are returning to the old way: They’re paying cash.

Turning away from the age of plastic, these shoppers say that the act of handing over that cold, hard cash makes them think twice about spending — in a way that using a card does not.


“When the money’s gone, it’s gone,” said Kristi West, a Raleigh, N.C., mother of two who is moving her family to a cash-only system for most purchases this year. “You can feel that money, and you can look at that money, and you can count it. When you slide that debit card, you just slide that card. ” There are lots of reasons people might consider for switching back to cash.

Some, mired in debt and cut off from credit lines, may have no choice. Others may simply be feeling the pinch of the tight economy and mounting household debt.

That’s not to say credit isn’t king. It’s generally safer than carrying lots of cash, most cards come with some kind of reward, and there’s the ease of use, especially as more of us make purchases online. In the United States, the average household has at least one credit card and carries nearly $10,700 in credit card debt, according to

Debit and credit card transactions continue to increase in popularity — up from a combined 38 percent of all transactions by sales volume in 2005 to 45 percent in 2010, according to The Nilson Report.

But there’s no question: Cash is holding its own as part of a broader trend by some shoppers of getting back to basics after the recession.

Despite the increase in credit and debit transactions, cash payments have remained fairly stable. Nilson reports that cash transactions went from 21 percent of transactions by volume in 2005 to 19 percent in 2010.

“Consumers that carry a balance even occasionally or have had trouble making their payments in the past are increasingly gravitating toward other methods of payment either by choice or by force,” said Greg McBride, analyst for financial website

“For some consumers, it’s a fundamental shift.”

Samantha Comfort of Garner, N.C., is switching to cash to try to better control her spending. She wants to achieve several financial goals this year, including paying off her car and an emergency $3,000 car repair from last year that the family had to put on credit.

Most people who convert to the cash system still keep a card for emergencies and for certain things, including online purchases.

“I would go cash with everything, but some things you really can’t,” Comfort said.

“We’re Netflix people, and I can’t pay for Netflix with cash. Or, booking a hotel is pretty tough to do with cash. I’m going to have to keep a card, maybe even two.”

Still, proponents of the cash system say the hassle of relearning how to spend in cash is worth it, especially when it comes to teaching their kids about money. analyst McBride warned, though, that this system is not for everyone. For the 40 percent of credit card holders who pay off their balances every month, it may make more sense to take part in a reward program that gives airline miles, cash back or something else in return for items charged.

“You’ve got to know what’s a fit for your personality,” he said. “But regardless of what you choose, the theme of better governing of our own finances and getting a handle on our spending is a positive development.”

Do you think paying in cash would help you better keep track of finances? Will people ever stop using their debit cards?
If you have a question about bankruptcy or financial planning contact David from Ambrose Law Group at 248-624-5500

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