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Chapter 7 Bankruptcy And Preferences

May 28, 2016


Preference in Chapter 7 Bankruptcy

     When additional payments over and above the minimum of more than $600.00  are made to one unsecured creditor before another unsecured creditor it is considered a preference.   In bankruptcy there are 2 types of preferences:  an insider or an outsider.  An insider preference would be a family member or business associate.  An example of an outsider preference would be a credit card company.  

     The bankruptcy court treats the 2 types of unsecured creditor preferences differently.  If the unsecured creditor is an insider creditor, then there is a 1 year look back for any payments made to that creditor.  This means that the bankruptcy court can take back some or all of the payments made to that insider creditor.  When this happens all unsecured creditors are allowed to get a portion of these monies by contacting the trustee.  The bankruptcy trustee will then distribute the preference funds to all unsecured creditors that apply pro-rata .  Outsider creditors have a 91 day look back period.  

     It is this look back period that allows the bankruptcy court to get back monies that were garnished from a debtor's paycheck and/or bank account.  If a debtor has a garnishment, then filing for bankruptcy is a viable option for getting some or all of the money back.  However, if a debtor recently paid off a loan to a parent or sibling, then he/she may want to wait before filing for bankruptcy.  


Call us today for a free phone consultation.  The JRothstein Law Group PLLC serving the greater Lansing, MI area.

Chapter 7 Bankruptcy & A Fresh Start

Apr 27, 2016


   If you are struggling to pay your bills, living paycheck to paycheck, then Chapter 7 Bankruptcy maybe a viable solution for you.  Filing a Chapter 7 Bankruptcy allows the debtor to wipe out his/her unsecured debts and allows for a fresh start/clean slate.  Often a person's credit rating improves after filing for bankruptcy.

  Below is a non-exhaustive list of reasons that individuals file for Chapter 7 Bankruptcy:

  • Credit Card Debt
  • Loss of Income
  • Medical Bills
  • Creditors Calling
  • Garnishments
  • Money Judgements Against Debtor
  • Some IRS Tax Issues 

   If you have any of theses issues please call us today for a free 30 minute phone consultation at (517) 575-8039.   The JRothstein Law Group PLLC can help turn your financial frown upside down.

Serving the Greater Lansing, area including Clinton, Eaton, Ingham & Shiawassee Counties.

Bankruptcy Chapter 7 Or 13 And Garnishments

Mar 28, 2016

Are you being garnished?  Have you been sued by a creditor?


A Chapter 7  or 13 Bankruptcy may be able to help.


  • Getting behind in your credit card payments may trigger your creditor to garnish your paycheck.  
  • A creditor may sue you and obtain a judgment against you that allows them to garnish your wages.
  • A creditor can garnish up to 25% of your net income.  This is a huge amount, especially if you are one of the millions of Americans living paycheck to paycheck.
  • Filling for bankruptcy will stop the garnishments.
  • However, did you know that  you may also be able to get back some, if  not most, of the money that was garnished from you paycheck?
  • Our experienced attorneys can help.  We practice in the areas of Chapter 7 and Chapter 13 Bankruptcy state wide.
  • Call today at (517) 575-8039 for a free 30 minute consultation, or visit our website at JRothsteinLaw.com

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