Last week, this column discussed who can benefit from Chapter 7 bankruptcy. This week, Chapter 13 bankruptcy law will be the focus. Who in Michigan is Chapter 13 designed for? Is it for you?
Chapter 13 bankruptcy is often called the wage earner’s plan. It is for people who have a good amount of income coming in, but it just is not enough to cover all of their debts. The simple truth is anyone can experience economic troubles. It is not just low-income people who struggle to pay their debts.
If you do not qualify for Chapter 7 relief because you make too much, Chapter 13 can still offer you the debt relief you need — just in a different way. With this type of bankruptcy, a debt repayment plan is created and you will be responsible for making the required payments for three to five years — whichever term applies to your case. At the end of your bankruptcy term, qualifying debts will be discharged and your obligations to some or all of your creditors will be discharged.
Michigan residents who do qualify for Chapter 7 relief do have the option to file a Chapter 13 petition instead if they feel doing so would better suit their needs. Legal counsel can provide you with all the information you need to make an informed decision before you submit a bankruptcy filing in court. If you would like to learn more about the benefits of Chapter 13 bankruptcy law in order to determine if it is a good option fit for your economic situation, please take a moment and visit our firm’s website.