Common Legal Questions: Answers from Upton Law PLLC
At Upton Law PLLC, we often receive questions from clients about complex legal situations. To help you navigate these challenges, we've compiled answers to some of the most frequently asked questions. Whether you're dealing with garnishments, repossessions, or foreclosures, here are some of the common questions we are asked:
What Should I Do as a Business Owner When I Receive a Garnishment Letter?
Garnishment can be confusing, especially for small businesses without an HR department. If you receive a garnishment letter, you must act quickly. First and foremost, you must submit a disclosure to the firm that sent the garnishment document, confirming whether the person still works at your company.
In Michigan, garnishment laws limit how much can be taken from an employee's paycheck, usually up to 25%. This amount must be withheld from their paycheck every pay period and sent to the address provided in the garnishment notice. If you have a payroll service, they can handle this process for you. Keep in mind that the garnishment will only stop if the court that issued it cancels it, and it is up to the creditor to track the individual if they change jobs. In Michigan, a judgment can last for a minimum of 10 years.
How Does a Repossession Impact My Credit?
Repossession, whether voluntary or involuntary, has significant consequences on your credit. Once your car is repossessed, the lender will auction it off. However, the creditor can sue you for the difference if the auction doesn't cover the total amount you owe. This remaining balance is referred to as a "deficiency."
The creditor can continue to report the deficiency as a negative mark on your credit report each month, and eventually, they may obtain a judgment against you. This will allow them to garnish your wages for the remaining balance. Many people mistakenly believe that their obligation ends once the car is repossessed, but the financial impact can continue long after the vehicle is gone.
What is the Difference Between Chapter 13 and Chapter 7 Bankruptcy?
Choosing between Chapter 13 and Chapter 7 bankruptcy is a significant decision and depends on your specific financial situation.
Chapter 7 Bankruptcy: Often referred to as "liquidation bankruptcy," Chapter 7 allows you to discharge most unsecured debts, such as credit card balances and medical bills. In this process, your non-exempt assets may be sold by a trustee to pay off creditors. This option is typically faster, taking about 3 to 6 months, but you must meet specific income requirements to qualify.
Chapter 13 Bankruptcy: Known as "reorganization bankruptcy," Chapter 13 is for individuals with a steady income who need time to catch up on their debts. Instead of liquidating assets, you create a repayment plan to pay off your debts over a period of 3 to 5 years. This option allows you to keep your property, including your home, if you can stick to the repayment plan. Chapter 13 is often chosen by those who are behind on mortgage payments and want to avoid foreclosure.
Both types of bankruptcy have long-term effects on your credit, but they can also provide a fresh start by resolving overwhelming debt.
I Received a Notice That My House is About to Go into Foreclosure. What Should I Do Next?
If you've received a foreclosure notice, it's crucial to act immediately. Many people wait too long, hoping the situation will resolve itself, but delaying can make it more difficult to save your home. The sooner you contact a bankruptcy attorney, the better your chances of finding a solution before your home is sold. Once the sale date has passed, your options become severely limited, making it much harder to reverse the foreclosure.
How Can I Protect My Assets From Legal Action or Debt Collection?
Protecting your assets is critical for many individuals and business owners, especially when facing potential legal action or debt collection. There are several strategies you can consider to safeguard your property and finances:
Setting Up a Trust: Placing assets in a trust can protect them from creditors, as the assets are no longer in your personal name but are managed by the trust.
Homestead Exemption: In Michigan, homeowners can protect a portion of their home's value from creditors through the homestead exemption. This can be particularly valuable if you're facing bankruptcy or legal action.
LLC Formation: If you own a business, forming a Limited Liability Company (LLC) can shield your personal assets from business debts and liabilities. It's important to understand that the LLC itself must be properly maintained to provide this protection.
Retirement Accounts: Certain retirement accounts, like 401(k)s and IRAs, are usually protected from creditors under federal and state laws. Ensuring these accounts are fully funded can be a key part of your strategy for asset protection.
Each of these strategies has specific legal requirements and implications, so it's crucial to consult with a knowledgeable attorney to determine the best approach for your situation. At Upton Law PLLC, we can help you evaluate your options and implement the right measures to protect your hard-earned assets.
Final Thoughts
Facing legal and financial challenges like garnishments, repossessions, or foreclosure can be overwhelming, but you don't have to navigate them alone. At Upton Law PLLC, we are here to provide the guidance and support you need to make informed decisions and protect your rights. Whether you're dealing with debt or property issues or need help understanding your legal options, our team is dedicated to helping you find a path forward. Reach out for a consultation and take the first step toward resolving your legal concerns.
Meet the founderShakeena Melbourne
At the heart of Upton Law is Shakeena Melbourne, founder and Principal Attorney, a lawyer who is a fierce advocate for your peace of mind and happiness.
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