Michigan residents who have found themselves in difficult financial positions often do not know what to do to fix the situation. There are a number of debt relief options out there, but they are not sure which will best suit their needs. This week, this column will address Chapter 13 bankruptcy law and how it can help a number of people achieve the financial relief that they need.
Chapter 13 bankruptcy is for individuals who have money coming in but not enough to cover the debts. Their income level is too high for them to qualify for debt discharge offered in a Chapter 7 filing. If approved, a Chapter 13 filing will result in the forming of a debt repayment plan, subject to the court's approval, that fits within one's current budget. Only after the repayment period is over will certain remaining debts be discharged.
Receiving Chapter 13 approval is quite the process. There are a number of steps between filing and the final court hearing. Along the way, creditors do have the right to contest the filing, though some may not go that far because they just want their money and this type of bankruptcy will help them recover part or all of the funds owed them.
A Chapter 13 filing begins with filling out the proper paperwork. Along with one's filing, it is necessary to submit a proposed repayment schedule. If there are no hiccups and if creditors and the court accept the proposed plan, approval may be easy to come by. If there are issues with the plan, one can make adjustments to it and resubmit. If no plan is agreed upon, the court may deny the bankruptcy filing.
There are a number of benefits to utilizing Chapter 13 bankruptcy law if it is something for which one qualifies. Not only does it offer debt relief, but it also stops creditor harassment and allows Michigan residents to remain in their homes -- among other things. The key to getting approval is making sure filings are submitted error-free and with reasonable proposed repayment plans. Legal counsel can help those who are considering this type of bankruptcy figure out if they qualify and start the process if they do.