Filing For Chapter 13 Bankruptcy
If you are considering filing for Chapter 13 bankruptcy, our Southfield, MI Chapter 13 bankruptcy lawyer can help you make an informed decision and assist you throughout the legal process. There are many important considerations when deciding to file for bankruptcy, such as choosing between filing for Chapter 7 or 13. A Chapter 13 bankruptcy lawyer can explain the nuances of Chapter 13 and other types of bankruptcy and help you determine if it is the right step for you to take. To discuss your situation with a lawyer today, contact our team at Gudeman & Associates, P.C. to schedule a consultation.
Understanding Chapter 13 Bankruptcy
Chapter 13 bankruptcy is often referred to as “reorganization bankruptcy.” This is because it involves repayment of debts through a payment plan that spans a period of three to five years. Eligibility of Chapter 13 is usually dependent on having a stable income with enough disposable income to repay debts according to the repayment plan. It is often the right choice for individuals who wish to protect assets such as their home or car and can meet the strict terms of a repayment plan in order to do so.
Your Repayment Plan
Your exact repayment plan will vary based on your debts and assets, but there are some general guidelines for a repayment plan in the Eastern District of Michigan that our Southfield Chapter 13 bankruptcy lawyer can help you understand.
The first step of your repayment plan is putting together a budget of your income and expenses. Enough income will be used by you for your necessary and typical expenses such as food, utilities, gas, and clothing. Other income will be set aside to make payments to creditors.
Payment to creditors in Chapter 13 bankruptcy is paid to a trustee who distributes the payment to your creditors. If you were current on home and car payments at the time of filing, you may continue making these payments to your creditors rather than a trustee. If possible, this allows you to avoid administrative fees that are added to your payment.
In your repayment plan, you will pay the trustee a set amount that covers secured and priority claims. If you have extra disposable income, it will often be used to pay unsecured creditors.
How a Lawyer Can Help You
Our Southfield Chapter 13 bankruptcy lawyer can assist you through every step of the process when filing for Chapter 13 bankruptcy. Our assistance starts with a consultation where we will listen to the details of your specific situation and advise you on the best path forward for you. From there, we will assist you in filing and represent you throughout the duration of your repayment plan, helping ensure that the process goes smoothly from its inception to the end of your repayment plan.
We understand the delicacy and importance of a decision such as filing for bankruptcy. It is our job not only to provide legal assistance, but also some comfort and peace of mind during a difficult period for you. Your case and your financial well-being is important to us, and we will work hard to help you work towards a brighter future. To discover more about how we can assist you, contact Gudeman & Associates, P.C. today.
Qualifying for Chapter 13 Bankruptcy
Our compassionate Southfield, MI Chapter 13 bankruptcy lawyer knows that facing financial challenges can be overwhelming. If you’re struggling with debt and seeking a way to regain control of your finances in Michigan, Chapter 13 bankruptcy may offer a viable solution. This legal process allows individuals to create a manageable debt repayment plan while retaining their assets and avoiding the liquidation of their property.
Meeting the Income Eligibility Criteria
To qualify for Chapter 13 bankruptcy in Michigan, you must meet specific income eligibility criteria. Your income, whether from employment, self-employment, or other sources, must be sufficient to cover your essential living expenses and allow you to make regular payments toward your debt repayment plan.
Completing Credit Counseling
Before filing for Chapter 13 bankruptcy, individuals in Michigan are required to undergo credit counseling from a government-approved agency. This counseling aims to assess your financial situation, explore alternative solutions, and provide valuable financial education. Once you complete the credit counseling, you’ll receive a certificate, which is a crucial document for your bankruptcy filing.
Secured and Unsecured Debt Limits
Chapter 13 bankruptcy involves distinguishing between secured and unsecured debts. Secured debts are tied to collateral, such as a mortgage or car loan, while unsecured debts have no collateral, like credit card debt or medical bills. There are specific limits on the amount of secured and unsecured debt you can have to qualify for Chapter 13. These limits can change, so it’s essential to consult with your Southfield Chapter 13 bankruptcy lawyer to ensure your debt falls within the allowable limits.
Commitment to a Repayment Plan
Chapter 13 bankruptcy revolves around creating a manageable repayment plan, typically spanning three to five years. To qualify, you must demonstrate your ability to commit to this plan by making regular payments on time. The plan should cover priority debts, such as taxes or child support, and contribute to the repayment of unsecured debts.
Not Having Filed for Chapter 13 in the Past
In Michigan, you’re generally eligible for Chapter 13 bankruptcy if you haven’t filed for this type of bankruptcy within the past two years. Additionally, if you’ve had a Chapter 7 bankruptcy discharge within the past four years or a Chapter 13 bankruptcy discharge within the past two years, you may need to wait before filing for Chapter 13 again.
Consult Our Team For Guidance
Navigating the complexities of Chapter 13 bankruptcy in Michigan requires legal expertise and a comprehensive understanding of the state’s laws and regulations. We specialize in bankruptcy law and have a deep commitment to helping individuals regain financial stability. Our experienced attorneys will assess your unique situation, guide you through the bankruptcy process, and develop a repayment plan that suits your needs.
If you are considering Chapter 13 bankruptcy in Michigan or have questions about your eligibility, we invite you to contact Gudeman & Associates, P.C. today. Our dedicated team is ready to provide personalized assistance and help you take the first steps toward a brighter financial future. Don’t let debt control your life; let us be your trusted partner in achieving financial relief and peace of mind. Call our Southfield Chapter 13 bankruptcy lawyer for help today.
5 Differences Between Chapter 7 And Chapter 13
When facing overwhelming debt, individuals often turn to bankruptcy as a means of obtaining financial relief. Two common forms of bankruptcy are Chapter 7 and Chapter 13, each offering different benefits and considerations. Understanding the key differences between these two chapters is crucial for making informed decisions about your financial future. A Southfield, MI Chapter 13 bankruptcy lawyer can help you decide between the two based on their professional opinion as there are important differences to be aware of:
1. Eligibility Requirements
One of the primary differences between Chapter 7 and Chapter 13 bankruptcy is the eligibility requirements. Chapter 7 bankruptcy is typically available to individuals with limited income who pass the means test, which evaluates their ability to repay debts. On the other hand, Chapter 13 bankruptcy is designed for individuals with a regular income who can afford to repay some or all of their debts through a repayment plan.
2. Asset Protection
Another significant difference between Chapter 7 and Chapter 13 bankruptcy is how assets are treated. In Chapter 7 bankruptcy, non-exempt assets may be liquidated to repay creditors, while exempt assets are protected from liquidation. In contrast, Chapter 13 bankruptcy allows individuals to retain their assets and repay debts over time through a court-approved repayment plan.
3. Debt Discharge
Chapter 7 bankruptcy offers a relatively quick debt discharge process, typically within a few months of filing. However, not all debts are dischargeable in Chapter 7, including certain tax debts, student loans, and child support obligations. In contrast, Chapter 13 bankruptcy involves a repayment plan that lasts three to five years, during which some debts may be discharged upon completion of the plan. Depending on how much debt you have and what kind of debt it is, a lawyer can direct you towards the best bankruptcy plan for your situation.
4. Repayment Plan
In Chapter 7 bankruptcy, there is no repayment plan; instead, non-exempt assets are liquidated to repay creditors. In Chapter 13 bankruptcy, individuals propose a repayment plan to the court, outlining how they will repay their debts over the course of three to five years. The repayment plan must be feasible and approved by the court, and individuals must make regular payments to a trustee, who distributes the funds to creditors.
5. Duration Of Bankruptcy Process
Chapter 7 bankruptcy typically offers a faster resolution than Chapter 13 bankruptcy. Chapter 7 cases are usually completed within a few months of filing, allowing individuals to obtain a fresh financial start relatively quickly. In contrast, Chapter 13 bankruptcy involves a longer process, as individuals must adhere to a repayment plan for three to five years before receiving a discharge of eligible debts. However, all this is dependent upon what your Southfield Chapter 13 bankruptcy lawyer thinks about your particular case as each one is unique and will have different timelines.
At Gudeman & Associates, P.C., we understand the complexities of bankruptcy law and are here to help you navigate the process. Whether you’re considering Chapter 7 or Chapter 13 bankruptcy, our experienced Southfield Chapter 13 bankruptcy lawyer can provide you with personalized legal guidance and representation. Contact us today to schedule a consultation and take the first step toward a brighter financial future.
Southfield Chapter 13 Bankruptcy FAQs
Understanding the complexities of Southfield, MI Chapter 13 bankruptcy can be overwhelming. At Gudeman & Associates, P.C., we believe in providing clarity and support to our clients throughout their financial recovery journey. Below are some frequently asked questions about Chapter 13 that we often address with our clients.
What Debts Can Be Reorganized Under Chapter 13?
Chapter 13 allows for the reorganization of various types of debt. This includes secured debts like mortgages and car loans, and unsecured debts such as credit card bills and medical expenses. With a bankruptcy lawyer, you can formulate a repayment plan that restructures these debts, often reducing the amount owed or extending the repayment period. This makes managing your financial obligations more feasible.
How Does Chapter 13 Affect My Credit Score?
Filing for Chapter 13 will impact your credit score initially, and it will remain on your credit report for seven years. However, the effect lessens over time. It’s worth noting that by the time many consider bankruptcy, their credit is already negatively impacted by missed payments or defaults. A bankruptcy can actually be a proactive step towards rebuilding your financial standing, and our Southfield Chapter 13 bankruptcy lawyer team can guide you in this rebuilding process.
Can I Keep My Car If I File for Chapter 13 Bankruptcy?
One common concern is whether personal assets, like cars, can be retained when filing for bankruptcy. In Chapter 13, you can generally keep your car. Your repayment plan, crafted with the help of a bankruptcy lawyer, will include provisions for car loan payments, which could be restructured to make them more affordable. It’s a balance of protecting your assets while managing your debts.
How Often Can I File for Chapter 13?
There are specific time limits on how often you can file for bankruptcy. After completing a Chapter 13 case, you need to wait two years before filing another Chapter 13. This period starts from the date you filed your initial bankruptcy petition. It’s important to see this as part of a larger financial strategy, rather than a repeated fallback.
What Happens If I Can’t Keep Up with Chapter 13 Payments?
If you find yourself unable to make payments under your Chapter 13 plan, there are options available. These might include modifying your plan to accommodate changes in your financial situation, or in some cases, converting your case to a Chapter 7 bankruptcy. Our attorneys can work with you to explore these options, ensuring that your financial recovery stays on track.
Filing for Southfield Chapter 13 bankruptcy is a significant decision, but it’s one that can offer a pathway to a more stable financial future. At Gudeman & Associates, P.C., we are committed to guiding our clients through every step of their bankruptcy journey, providing support, advice, and legal expertise. If you’re considering filing for bankruptcy, or just have questions about the process, we encourage you to reach out to us. Let us help you take the first step towards regaining control of your finances.
Chapter 13 Bankruptcy Glossary
When working with our Southfield, MI Chapter 13 bankruptcy lawyer, it’s helpful to understand the legal language often used throughout the process. Chapter 13 is structured to help individuals restructure their debt and keep their assets while paying creditors over time. Below, we’ve outlined several important terms that are commonly encountered in these cases. Knowing the meaning behind these phrases can help make the process more understandable and less stressful.
Chapter 13 Bankruptcy
This form of bankruptcy is specifically designed for individuals with a steady income who want to repay debts without losing their assets. Under Chapter 13, the debtor proposes a repayment plan that typically lasts three to five years. The court approves the plan, allowing the individual to make manageable monthly payments. Unlike Chapter 7, Chapter 13 does not involve liquidating property, which makes it a preferred choice for those who want to protect their home, car, and other significant assets while catching up on overdue obligations.
Repayment Plan
The repayment plan is the foundation of any Chapter 13 bankruptcy case. This plan outlines exactly how much the debtor will pay, when payments will be made, and how funds will be distributed to creditors. It must comply with legal standards and be approved by the bankruptcy court. The plan prioritizes secured debts and priority unsecured debts like taxes or domestic support obligations, with remaining disposable income used for unsecured creditors. According to our Southfield Chapter 13 bankruptcy lawyer, a well-prepared plan is key to gaining court approval and remaining in good standing throughout the repayment period.
Disposable Income
Disposable income refers to the amount of money left over after covering necessary living expenses such as housing, food, transportation, and insurance. In a Chapter 13 case, this amount determines how much the debtor must pay toward their debts each month. The court reviews disposable income carefully to assess whether the proposed repayment plan is feasible. Maximizing allowable expenses while still meeting legal obligations can influence how much is owed to unsecured creditors during the life of the plan.
Bankruptcy Trustee
A trustee is appointed by the court to oversee and administer the bankruptcy case. In Chapter 13 cases, the trustee plays a hands-on role, reviewing the debtor’s repayment plan, collecting monthly payments, and distributing those funds to creditors. The trustee also ensures the debtor is following the terms of the plan and may object if the proposal is unfair or inaccurate. The trustee does not represent the debtor or the creditors but acts as a neutral party to enforce the bankruptcy code.
Automatic Stay
An automatic stay is a legal protection that goes into effect the moment a bankruptcy case is filed. It stops creditors from taking collection actions such as wage garnishments, foreclosure proceedings, repossession, or lawsuits. For many filers, the automatic stay offers immediate relief and breathing room to reorganize finances. This stay remains in place while the bankruptcy case is active, unless lifted by a court order. It’s one of the most valuable tools our Southfield Chapter 13 bankruptcy lawyer uses to protect a client from creditor pressure. Since 1973, our team at Gudeman & Associates, P.C. has helped clients plan for both the foreseeable and unforeseeable future, guiding them through every step of the process.
