Understand Chapter 13

Chapter 13 Bankruptcy Attorneys in Detroit

Debt Relief in Metro Detroit, Genesee and Livingston County & Northern Michigan

What is Chapter 13?

Many people mistakenly believe that bankruptcy is only for those with little to no income or property. However, filing for Chapter 13 bankruptcy is a viable debt-relief option for those who can afford their bills but cannot pay off all their debt in a reasonable amount of time.

Chapter 13, also known as a “wage earner’s plan”, is a type of bankruptcy that allows individuals with regular income to develop a plan to repay all or part of their debts.

Under this chapter, debtors propose a structured payment plan to their creditors, which spans three to five years. If a debtor’s monthly income falls below the state median, the repayment period is three years, unless the court approves a longer duration. Conversely, if a debtor’s monthly income surpasses the state’s median, the repayment plan typically extends to five years.

Why Choose Chapter 13 Bankruptcy?

Some choose Chapter 13 because they own several assets that would be liquidated under Chapter 7, while others choose Chapter 13 because they make too much to qualify for Chapter 7. Each chapter has its advantages and disadvantages. Our bankruptcy lawyers can carefully assess your options during a complimentary consultation.

Individuals have a number of benefits over liquidation under Chapter 7. Perhaps most importantly, it allows them to keep their houses from foreclosure.

No matter your situation, the team at Wolfson Bolton Kochis PLLC is here to help you understand everything you need to know about Chapter 13 bankruptcy. Our team of Chapter 13 bankruptcy attorneys serve Our team of Chapter 13 bankruptcy attorneys serves Genesee County, Livingston County, Northern Michigan, and the Upper Peninsula.

What Are the Benefits of Chapter 13?

Chapter 13 bankruptcy is commonly used by individuals who want to clear their debt while retaining control of their assets. It’s particularly beneficial for those with consistent income who can commit to a long-term repayment plan.

A critical benefit of opting for Chapter 13 is the opportunity to prevent the foreclosure of one’s home. By initiating a filing under this chapter, individuals can halt foreclosure actions and may have the chance to resolve overdue mortgage payments over an extended period.

Another benefit is that it allows people to reschedule secured obligations and spread them out over the term of the Chapter 13 plan. This could result in decreased payments.

Third parties who are accountable to the debtor on consumer debts are similarly protected under Chapter 13. This clause may safeguard co-signers.

Finally, unlike Chapter 7, Chapter 13 permits debtors to return their obligations over time through a court-approved repayment plan.

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Who Can (& Should) File for Chapter 13?

To qualify for Chapter 13 bankruptcy, you must owe no more than:

$419,275 in noncontingent, liquidated unsecured debts; and
$1,257,850 in noncontingent, liquidated secured debts.

So long as you owe less than these amounts, you can qualify for Chapter 13, regardless of your monthly income or the value of your assets.

Chapter 13 may be the right solution for you if:

You have a steady source of income. Your income should be enough to make monthly payments toward your debt for three to five years.
You have assets that you would lose through liquidation under Chapter 7. Do not assume, however, that the Chapter 7 trustee will take everything you own — or even anything at all. Speak with our attorney to learn about property exemptions and whether Chapter 13 is the only way to keep your funds and assets.
You make too much to qualify for Chapter 7. Our attorney can help you determine your eligibility for Chapter 7 through the means test.
Your biggest goal is to avoid repossession and/or foreclosure. While Chapter 7 may eliminate your liability for a mortgage or auto loan, it won’t necessarily prevent you from losing your home or vehicle. Chapter 13, on the other hand, can give you the time you need to catch up on delinquent payments, reaffirm your loan, and even negotiate a loan modification with your lender.

Why Choose WBK Bankruptcy?

Our certified consumer bankruptcy attorneys have years of experience with assisting clients with bankruptcy and other debt-related matters. We are here to provide the well-honed legal skills you need, as well as the warm, welcoming environment you deserve. Let us conduct a thorough assessment of your situation so we can determine whether Chapter 13 bankruptcy or another debt-relief option can help you achieve financial freedom.

Schedule your appointment today by calling (248) 247-7070 or contacting us online. We know your time is valuable, which is why our Metro Detroit Chapter 13 bankruptcy lawyers offer same-day services and immediate support.