Michigan Bankruptcy Attorney Question – Will I Lose My 401K or My House In Chapter 7 Bankruptcy?

Home » General » Michigan Bankruptcy Attorney Question – Will I Lose My 401K or My House In Chapter 7 Bankruptcy?


I live in Roseville Michigan and I have been struggling ever since I lost my husband last year and I may need a Michigan bankruptcy attorney to help with my debt and file chapter 7 bankruptcy for me before I can’t afford my house anymore but I am concerned.  Like everyone I guess I have a lot of credit card debt ($18,000 total) , some medical bills ($2,800) , and other miscellaneous debt but I am current on my house.  I make $29,000.00 a year and have about $22,000 in my 401K.  First, will this debt be all discharged if I file.  Second, will I lose my 401 k money or my house.  I don’t want to lose my house if I file bankruptcy.  I owe $120,000 approximately but I bet in this market it’s only worth about $140,000.00 max (the house across the street sold for like $139,000 last year and it’s like mine).  Will the bank take my house if I file bankruptcy?  Also, one of my credit cards went to collection already, can they garnishee my wages soon?  I need an affordable solution to my problem even if it’s bankruptcy.

I’m sorry I have so many questions but I am scared and don’t know what to do.  I appreciate whatever advice you can give.


  1. Peter A. Torrice on March 29, 2010 at 5:36 pm said:

    Thank you for your questions. Here are the answers to the following questions:

    Will all my debt be discharged?

    Of course, no attorney can guarantee you anything. Therefore, I can not guarantee that all of your debts will be discharged because once you file for the bankruptcy there are a lot of variables that can take place. For example, if the creditor wants to contest the dischargeability of a debt due to fraud or another type of non-dischargeability action. Accordingly, I suggest that you hire an attorney like myself who has experience with the United States Bankruptcy Court laws.

    Will I lose my 401k?

    401k’s are usually 100% exempt from the creditors in a bankruptcy. However, there are some exceptions that need to be taken into consideration before determining that this is the case. Again, this is another reason why you need an experienced bankruptcy attorney. The last thing that you want to happen is have your savings be taken by the trustee and you left with nothing.

    Will I lose my house?

    There are a lot of considerations to be made as to whether your house can be taken. Again, you are entitled to a certain exemption amount for the equity in your home. Many times we will have an appraiser come and appraise your house prior to filing for a bankruptcy to get an exact value. Doing this is a great precaution and will give me the ability to answer this question more precisely. In this market homes are rarely worth more than what is owed on them.

    Garnish wages?

    Your wages can not be garnished until there is a judgment against you and a court orders that your wages be garnished. Many times the “shady” collection agency employees will threaten that they are going to take your money from your pay checks. This is a lie until they get a judgment against you. However, please note that you should file bankruptcy immediately if they are threatening this because a law suit is coming. By filing bankruptcy the automatic stay goes in effect and stops any collection efforts.

    Please call me with more questions or come in for a free appointment. Below is my contact information.

    Peter A. Torrice
    Canu Torrice Law
    32059 Utica Road
    Fraser, MI 48026

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