Filers will propose and commit to a plan that reorganizes debts and obligations based on their current ability to pay, and the value of the assets they intend to keep.
Our Metro Detroit consumer repayment plan lawyers can help you make the most of your Chapter 13 bankruptcy filing. Our team at Wolfson Bolton Kochis PLLC strives to provide each of our clients with sophisticated consumer bankruptcy guidance and can work with you to develop an effective plan. We have a deep understanding of how reorganization and repayment plans are evaluated and approved in Michigan. We will serve as your trusted and capable advocate throughout each stage of the process. Out firm’s goal is to provide the counsel you need to overcome financial difficulties and secure a fresh start free of overwhelming debt.
Chapter 13 and Chapter 11 are the only reorganization and repayment plan bankruptcy options available for individuals. . Chapter 7 bankruptcy, also known as a “liquidation bankruptcy” may make more sense if you have little to no current income. While Chapter 7 bankruptcy is in most cases a more expedited process that results in the discharge of certain types of debt, it does involve liquidating non-exempt, unencumbered assets that have significant value. In a Chapter 13 or Chapter 11 individual bankruptcy, plan proponents may keep their unexempt assets with significant value unimpaired by liens.
Generally, you should consider pursuing a consumer debt repayment plan if you have considerable income, cannot keep up with credit card interest, or other debt payments, and have non-exempt assets that you do wish to retain. A Chapter 13 bankruptcy repayment plan can protect you from creditors and help you structure payments based on what you can currently afford.
To qualify for Chapter 13 you must have disposable income to make plan payments approved by the bankruptcy court. Contact our specialized consumer bankruptcy attorneys who can calculate your current disposable income.
You may not be able to file for Chapter 13 bankruptcy if your unsecured debts exceed certain limits. Our legal team can assess your unique financial circumstances and advise whether a consumer reorganization or repayment plan is the best option to treat your debt. Our Metro Detroit consumer bankruptcy attorneys can then evaluate your eligibility for Chapter 13 bankruptcy and explore your payment plan options.
When filing for Chapter 13 bankruptcy, you must propose a repayment plan. Your repayment plan will need to demonstrate how your disposable income will be used to repay your debts and obligations over a period of three to five years. The consolidated amount you must pay each month will be determined by your current disposable income — in other words, what you can currently afford — not the total amount of your debt.
It is important to understand that you will benefit from immediate relief upon filing for Chapter 11 or Chapter 13 bankruptcy, even before your plan is approved. The automatic stay will go into effect shortly after you file, preventing creditors from pursuing collection actions against you. This means that any imminent or ongoing foreclosures, repossessions, garnishments, and lawsuits cannot continue. The automatic stay will remain in effect throughout the duration of the bankruptcy.
Your plan must also follow all applicable bankruptcy laws. Certain debts receive “priority” under these laws and must be paid first in accordance with your repayment plan.
Priority debts include:
Nonpriority debts include credit card debt, medical bills, and personal loans. Plan payments will only need to address these debts once all priority debts have been paid. Given how these plans are typically structured, many filers will only pay a small fraction of what they owe on nonpriority debts. In some cases, they will pay nothing at all.
Once you have made all plan payments, you will generally be permitted to discharge any remaining unsecured debts, including medical debt and credit card debt. Secured debts cannot be discharged, but the process gives many filers the financial flexibility they need to catch up on payments and address debts that cannot be directly eliminated. For example, a successful reorganization plan can help you cure a mortgage default and save your home from foreclosure.
Your Chapter 13 repayment plan will be heavily scrutinized by the bankruptcy court, and professional legal guidance is often necessary to achieve a successful result. Our Metro Detroit consumer reorganization plan lawyers will work to structure a proposal that maximizes relief while meeting all legal requirements. At Wolfson Bolton Kochis PLLC, we are extensively familiar with the nuances of Chapter 13 bankruptcy and can leverage our resources to provide the knowledgeable and capable representation you deserve.
Schedule a free initial consultation to learn more about how a consumer reorganization plan can benefit your financial situation. Call (248) 247-7070 or contact us online today!