Some people cannot think back to that moment when their finances first started to spiral out of control. Others can nail down that one medical bill or the time they lost their job after purchasing a brand-new home. What many people do remember, however, is the moment they realized they were in way over their heads. This is the moment when many people first thought of filing for bankruptcy in Michigan.
Some remained hesitant because they did not know what to expect from the process. They may also not know what kind of bankruptcy to file for. People often prefer Chapter 13 if they believe they can get back on their feet with time and if they prefer to hold on to their assets.
Credit Karma explains that Chapter 13 bankruptcy allows filers to restructure their debt. This turns the debt into a consolidated repayment plan that may last for up to five years. People who are still unemployed may not qualify for this as they may need income to show that they might be able to repay their debts in time. For this reason, it is often nicknamed “the wage earner’s plan.”
At the start of the process, an individual may need to undergo credit counseling with an approved agency within the 180-day period prior to filing. Then, it is time to get the paperwork ready. Some people attempt to do this on their own, while others rely on professional assistance to ensure there are no mistakes.
They then file a petition and submit a repayment plan shortly thereafter. Following this, the individual may need to meet with trustees in court for a confirmation hearing. If the debtor sticks to the official plan, after three to five years, the debts may be discharged.
Individuals who are married may wonder if their partner could be affected, especially if they file jointly. USA Today states that it depends on how the couple splits asset ownership. Joint assets may get drawn into the process. Individually-owned assets may remain untouched. However, every case is different.