FREQUENTLY ASKED QUESTIONS

PROBATE AND ESTATE PLANNING

What is the minimum estate plan I should have?
At a minimum, you should have a will, power of attorney for healthcare, and power of attorney for finances. A will allows you to appoint guardians and conservators for your children under 18 years of age. You can also define how you want to have your assets distributed upon your death.

Are there any drawbacks to obtaining a guardianship?
A formal guardianship requires annual reports and court intervention in what is usually a very personal aspect of your life.

Are there any drawbacks to obtaining a conservatorship?
A conservatorship requires involvement in your affairs of the probate court. Annual accounting of how your conservator handles your assets is required. Professionals such as attorneys and accountants (in some instances) must be used. Your assets also become a public record.

Why should I have a Power of Attorney for Healthcare?
Power of attorney for healthcare avoids a formal guardianship proceeding. You get to appoint a trusted loved one to assist you with your healthcare needs should you become unable to communicate with your healthcare provider(s). Power of attorney for healthcare allows you to leave written instructions for your care, and based upon your wishes, your agent can also decide when it is appropriate to end extraordinary measures to maintain your life.

Why should I have a Power of Attorney for Finances?
Should you become disabled or no longer capable of managing your financial affairs, power of attorney for finances avoids a drawn out and costly conservatorship proceeding.

Is a trust better than a will?
Many people believe so. A trust aids you during your lifetime. A will is only implemented upon your death. A trust avoids probate proceedings. A will requires probate proceedings in order to transfer your assets. A trust can also aid you in the avoidance of estate taxes; however, a trust contains terms and concepts with which many people are unfamiliar. Martin L. Rogalski, P.C. can tailor comprehensive Estate Planning documents to your specific individual needs. Call us today to schedule your appointment.

BANKRUPTCY

Will I lose my house in bankruptcy?
Most people who file bankruptcy do not lose their home. The exemptions for your home equity are generous. In the few instances of home equity exceeding the maximum exemption amounts, arrangements for payment of the unprotected equity to the bankruptcy trustee can be made.

Will I lose my car?
To keep your car, you must generally be able to make payments upon the debt owed. If there is any equity, the exemptions to keep the vehicle are generous. You may want to discuss with your attorney the concept of redeeming the vehicle from its lien by paying the current fair market value of the vehicle to the lien holder.

Will bankruptcy stop a foreclosure?
Yes it can. In Michigan, the bankruptcy proceeding must be filed prior to the foreclosure sale; otherwise, it is too late to stop the foreclosure process. If a foreclosure sale has not occurred, a restraining order (called an automatic stay) generally prevents a creditor from taking steps to collect a debt. Restructuring of the debt can be accomplished in a Chapter 13 bankruptcy plan.

Can I stop repossession by filing bankruptcy?
Yes. The automatic stay, which stops a foreclosure sale, can also stop repossession. In Chapter 7, the relief is temporary in nature. In Chapter 13, the debtor can propose to address the obligation and pay the debt in a manner allowed under the law.

Can I get credit after bankruptcy?
The stigma of bankruptcy has been reduced over the last three decades. Credit is available after bankruptcy (sometimes even for a mortgage); however, the interest rate is usually higher than current market rates to reflect the increased risk to the lender. Generally, three years post-bankruptcy, if you qualify for a standard loan you can obtain market mortgage rates. Auto loans are available for used vehicles but the price and interest rates may be higher. Try not to obtain any credit immediately after bankruptcy. 

How long does a bankruptcy notation stay on my credit report?
A bankruptcy notation can stay on your credit report for up to ten years. Federal law requires that the bankruptcy notation be removed after the tenth year.