Michigan residents who are seeking debt relief options have likely looked into how bankruptcy may be able to help their situations. Filing for bankruptcy is a big step as there is a lot involved. Before taking the leap, it is wise to get any questions you may have answered by a bankruptcy law attorney.
While there are a lot of questions that could be asked about bankruptcy, this column will address some of the most common. First, what is the difference between a Chapter 7 and a Chapter 13 bankruptcy filing? In short, both are for personal debt relief purposes, but a Chapter 7 filing typically requires the liquidation of certain assets, while a Chapter 13 filing requires a court-approved debt repayment schedule.
What are the benefits of filing for bankruptcy? Each type of bankruptcy has its own benefits. In a Chapter 13 filing, aside from the creation of an affordable repayment plan, others include an end to creditor harassment, co-signer protections and credit reporting for only seven years. In a Chapter 7 filing, the main benefits include the discharge of certain debts and end to creditor harassment.
Finally, which type of bankruptcy is right for me? This will depend on a number of factors including what type of debts you have, your current income level and the state’s median income range — among others. If your income is considered high enough to repay your debts but you are simply struggling to do so, you may be able to pursue a Chapter 13 bankruptcy. If your income does not allow for a repayment plan, you may qualify for a Chapter 7 filing.
These are just a few of many questions you may have regarding bankruptcy. A Michigan bankruptcy law attorney will be able to answer any other questions you have and assist you in pursing the debt relief option that best benefits your specific circumstances. To learn more, please visit our firm’s website.