Gold, Lange & Majoros, P.C.
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Gold, Lange & Majoros, P.C.
24901 Northwestern Highway, Suite 444
Southfield, Michigan 48075
Telephone: 248-350-8220
Fax: 248-350-0519
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The Basics of Michigan Bankruptcy Law
In its most basic form, bankruptcy is a consumer protection law. It is a federal process, which allows consumers to have their qualified debts forgiven. The law recognizes that bad things sometimes happen to good people, and consumers sometimes do not have the ability to comply with creditors' repayment demands. Bankruptcy law is a unique type of law based on forgiveness rather than punishment. Bankruptcy does not seek to deter or regulate certain behavior as other laws do; it simply recognizes there are sometimes circumstances beyond the consumer's control, which can only be addressed through the cancellation of debt.

Filing for bankruptcy puts into effect the "automatic stay", which stops creditors from trying to collect any debt from you. The automatic stay immediately stops creditor phone calls, collection letters, wage garnishments, lawsuits, bank levies, and all other types of harassment, intimidation, and scare tactics by creditors.

Once a bankruptcy case is successfully completed, the consumer receives a discharge from the Bankruptcy Court. A discharge is a legal release from debts. Creditors are left with no legal cause to contact you or pursue debts listed in the bankruptcy documents.

There are two common ways for the typical consumer to file for bankruptcy, Chapter 7 and Chapter 13. Chapter 7 is the most common type of bankruptcy. It allows a consumer to discharge debts completely through a relatively short process. Chapter 13 is a debt consolidation plan that allows you to rearrange your financial affairs and repay all or a portion of your debts. It can also cure a default in your mortgage over time.