Chapter 13 Bankruptcy

Michigan Chapter 13 Bankruptcy Attorney

If you are contemplating filing for bankruptcy, it is important to determine which type of bankruptcy best suits your needs. This may depend on your assets, goals, or the debts you have acquired. Okemos bankruptcy lawyer Steven M. Feigelson has the knowledge and experience to help you understand the nuances of Chapter 7 and Chapter 13 bankruptcy. He is dedicated to helping Michigan clients in the Greater Lansing area, including St. Johns, Corunna, and Owosso, in finding the financial and legal solution that works best for them.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy does not involve the liquidation of assets, as in a Chapter 7 bankruptcy, but instead allows an individual to reorganize assets through a court-approved repayment plan so that he or she can slowly pay back debts and hold onto certain assets. Chapter 13 bankruptcy is available to both individuals and small businesses, and typically involves a repayment period of three to five years.

In some cases an individual may be required to file for Chapter 13 bankruptcy because they do not pass the “means test” required for Chapter 7. This can occur when your income is higher than the median income for Michigan and would allow you to pay at least $100 per month to your creditors over the course of five years. The exact calculations used to make this determination are complicated, and it is best to consult a qualified bankruptcy attorney if you believe you have an income above the median for Michigan.

The Chapter 13 Process

The first step in filing for bankruptcy is to gather all the paperwork you will need to support your bankruptcy claim. This includes:

  • Itemized lists of current sources of income
  • Proof of any major financial transactions from the last two years
  • Proof of your monthly living expenses
  • A list of all known debts you have incurred
  • Proof of all property owned (including any assets and possessions)
  • Tax returns for the last two years

Once you have gathered all of these materials, you will be required to file a bankruptcy petition and accompanying forms that describe your current financial status and any major financial decisions you recently made. These forms must be filed in the Michigan district bankruptcy court. It is important to note that all relevant creditors will have access to these documents, so it is extremely important to be thorough and honest in them. If a creditor believes that you have not revealed all relevant financial information, it could jeopardize your bankruptcy petition.

Creating a Repayment Plan

For Chapter 13 bankruptcy, you must also submit a proposed repayment plan for using your existing assets and income to slowly repay your creditors. This repayment plan must be approved by the court and pass three tests: (1) it must be delivered in good faith; (2) unsecured creditors must be paid at least as much as if a Chapter 7 bankruptcy had been filed; and (3) all disposable income must be paid into the plan for at least three years.

A hearing will be held with your bankruptcy judge to review your Chapter 13 plan. A trustee will be assigned to your bankruptcy case and time will be provided for any creditor to object to the plan. If there are objections, you must work with the trustee to resolve these concerns before the court will approve the plan. Once the plan is approved, your monthly repayment will be taken directly from your wages. If you comply with the plan for its entire duration, your outstanding debt will be discharged at the end of the 3-5 year time period.

The Advantages of Chapter 13 Bankruptcy

Because Chapter 13 bankruptcy does not involve the liquidation of assets, it can be an appealing option for individuals who have equity in certain property, such as a home, and would like to keep it. It is also a good option for those that may have a steady regular income but need help in creating a plan to pay off their debts. It is important to talk to an experienced bankruptcy attorney to assess your options.

Guiding You Through the Chapter 13 Process

If you are considering filing for Chapter 13 bankruptcy, Michigan bankruptcy attorney Steven M. Feigelson is here to help you review your assets and debts and determine if this is the best option for you. He understands the Chapter 13 process and can give you the legal advice you need to make a sound financial decision. For an initial consultation on your bankruptcy matters, call 517-333-3373 or contact us online.

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