Personalized Support from Chapter 13 Attorneys

Southfield Bankruptcy Attorneys Proudly Serving Clients in the Complexities of Michigan Bankruptcy Law

Are you facing overwhelming debt? Several debt relief options are available to Southfield residents who feel that they cannot get out from under their debts without financial assistance. Among the debt relief options are different types of bankruptcy.

Chapter 13 bankruptcy allows those with financial problems to develop a payment plan for settling their debts over three to five years. If you are struggling with debts, have a regular income, and seek to regain control of your financial situation, Chapter 13 bankruptcy may be the right option for you.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows individuals with financial challenges to consolidate their debt while making monthly payments to a bankruptcy trustee. A Michigan bankruptcy lawyer can assist in creating the payment plan, allowing you to pay back what you owe over three to five years.

The amount of the monthly payments and the length of the repayment plan will be based on the individual’s monthly income, monthly expenses, and the amount and nature of their debts.

Secured debts are paid 100% on the dollar, while unsecured debts may be repaid as little as 0% on the dollar. Once the individual repays everything in their payment plan, they will receive a discharge under bankruptcy Chapter 13.

To learn more about these and other bankruptcy matters, please contact our Michigan law offices to schedule your free consultation today. The decision to file for Chapter 13 bankruptcy should not be taken lightly, and you should consider all of your alternatives to help you repay your debts and make informed decisions about maintaining your financial well-being. Our legal team has several years of combined experience representing clients in Southfield, MI, and would be proud to represent your interests as you seek a more secure financial standing.

What Are Unsecured Debts?

Unlike other types of bankruptcy, Chapter 13 makes important distinctions between secured and unsecured debts. Secured debts are linked to collateral, such as a car loan or a mortgage. Unsecured debts, on the other hand, have no collateral, and examples include credit card debt and medical bills.

There are specific limits on the amount of secured and unsecured debts you are allowed to have in order to qualify for Chapter 13 bankruptcy. It is worth noting that these limits have been known to change, so it is important to speak with a Michigan bankruptcy attorney for legal guidance.

Examples of unsecured debts include the following:

Student loans
Utility bills
Credit card bills
Overdrafts
Personal loans and payday loans

Examples of secured debt include the following:

Mortgage payments
Car payments
Business mortgages
Home equity loans and home equity lines of credit

How Does Chapter 13 Differ from Chapter 7 Bankruptcy?

There are several different advantages to the different types of bankruptcy, including Chapter 7 and Chapter 13 bankruptcy.

Whereas non-exempt assets and property may be subject to seizure in a Chapter 7 bankruptcy, Chapter 13 bankruptcy protects these assets and does not allow them to be liquidated.

In a Chapter 7 bankruptcy, the creditors may go after co-debtors and co-signers on personal loans you may have. However, those co-debtors are protected from these collection efforts and phone calls by going through Chapter 13 bankruptcy.

While certain debts, such as alimony and child support payments, cannot be fully discharged in any type of bankruptcy, reorganization bankruptcy, like Chapter 13, allows these debts to be included in the three- to five-year plan. This could allow you to repay your debts over the duration of the repayment plan.

What Are the Advantages of Filing for Chapter 13 Bankruptcy?

The different types of bankruptcy you consider filing may have advantages and disadvantages. Before proceeding, it is worth remembering the several benefits of filing for bankruptcy.

In Michigan, Chapter 13 bankruptcy provides a legal method to remove a secondary lien on your home.

Whereas Chapter 7 bankruptcy sometimes involves the liquidation of assets, Chapter 13 bankruptcy keeps your secured assets safe.

Lowering your payments on certain loans, such as car payments, is possible.

Unsecured debts can be reduced or eliminated entirely. This can grant you a fresh start financially, allowing you to breathe again.

You may be able to negotiate payment terms on all unsecured debts at 0% interest rates with no late penalties.

You can improve your credit score over the duration of Chapter 13 bankruptcy proceedings.

By enacting an automatic stay, Chapter 13 bankruptcy can stop all creditor phone calls, wage garnishments, utility shutoffs, and collection efforts.

Do You Qualify to File for Chapter 13 Bankruptcy in MI?

Chapter 13 bankruptcy is for individuals with financial problems and significant debts that they are unable to repay in full. A maximum amount of both unsecured and secured debts is allowed before an individual can qualify for Chapter 13 debt relief.

Perhaps the most important factor in determining eligibility for Chapter 13 bankruptcy is that the individual in question must have a regular income. This regular income can come from several sources, including government benefits, employment, and self-employment. However, the key is to demonstrate to bankruptcy courts that you have consistent income, enabling you to pay your monthly installments in your repayment plan.

Your secured and unsecured debts must be within the limits set by Michigan bankruptcy laws to be eligible for Chapter 13 bankruptcy relief.

Finally, Chapter 13 debt relief is for individuals and not for businesses. Businesses seeking debt relief should consider other types of bankruptcy. Please contact our Southfield, Michigan, law office to schedule your free case review today.

What is the Chapter 13 Bankruptcy Process?

By working with an experienced bankruptcy lawyer, you can develop a uniquely tailored repayment plan that takes into consideration your financial situation, income, and debts. Your bankruptcy attorneys will help you through the entire legal process.

The bankruptcy process works as follows:

File a bankruptcy petition and receive your automatic stay
A Chapter 13 bankruptcy trustee will be appointed to your bankruptcy case to oversee necessary documentation and communicate with all interested parties
The bankruptcy court will send a notice to all of your creditors, and they will be given the opportunity to file any objections
You must submit a tax return
At this point, you will begin making payments on your payment plan
A meeting will be scheduled wherein you must attend and speak with creditors
You have the option to modify your repayment plan and then hold a confirmation hearing
Your creditors can file proof of claims
The bankruptcy trustee will send periodic statements to all interested parties
Every year, you must submit your annual income and expenses
You and your attorneys will then file proof of financial management course completion
After all of these steps have been completed, a bankruptcy court will grant a discharge of debt

How to Prepare for Your Bankruptcy Filing?

Before filing Chapter 13, you must gather all necessary documentation and financial documents. This may include credit card statements, tax returns, loan documents, bank statements, and all other financial records.

Take an inventory of your secured and unsecured debts, including personal loans, car loans, medical bills, and credit card debt. It is important to categorize your debts into the secured and unsecured categories.

Next, calculate your income and expenses. Subtract necessary living expenses, such as rent, utility bills, food, insurance premiums, and transportation costs from your monthly income.

Schedule a consultation with our bankruptcy law firm to discuss your bankruptcy case.

Do You Need the Legal Assistance of Southfield Bankruptcy Lawyers?

It is strongly recommended that you retain professional legal counsel when considering filing for bankruptcy in Michigan. Experienced legal representation can be all the difference between an unfortunate outcome and something far more successful.

Michigan bankruptcy lawyers can assist you in the following ways:

Assist in gathering all necessary documentation, information, and forms
Ensure that your payment plan is fair and reasonable
Defend your interests against creditors who attempt to lift the automatic stay
Seek modifications to your repayment plan if there are any significant changes in circumstances
At the end of your bankruptcy case, your attorneys will work to ensure that you receive a successful discharge of debts

Schedule a Free Consultation with an Experienced Michigan Bankruptcy Attorney Today

In many cases of financial distress, such as instances where individuals are dealing with costly medical bills, a divorce, job loss, or the death of a spouse, they may turn to a bankruptcy law firm for legal options. Our legal team serves individuals interested in obtaining a fresh financial start by going through bankruptcy proceedings. We are well-versed in Michigan bankruptcy laws and would be proud to represent your interests both in and out of bankruptcy court. To learn more about our legal services and how we may assist you during this difficult period, please schedule a free consultation with our experienced attorneys today.

You can get in touch with our legal team to schedule your free, no-obligation case evaluation by calling us at 248-671-6794.