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Chapter 13 bankruptcy is the second common form of bankruptcy available to individuals and families who want to get out from under unmanageable debt. The other common type of bankruptcy filing is a Chapter 7 bankruptcy petition.
Unlike Chapter 7 bankruptcy, Chapter 13 bankruptcy petitions are available in a wider range of circumstances. Also unlike Chapter 7, Chapter 13 bankruptcy does not discharge or liquidate all of your eligible debts. Instead, Chapter 13 bankruptcy reorganizes debt into a more manageable repayment plan over a five-year period of time.
Figuring out whether you qualify for Chapter 7 bankruptcy or must file Chapter 13 bankruptcy is a difficult decision. Often, the timing of the petition is very important. An experienced bankruptcy lawyer can examine your financial circumstances — present, past and future — and advise you on the best path to follow.
At the Livonia law firm of The Shaw Group, P.C., we have more than 20 years of experience helping southeastern Michigan families make use of bankruptcy and other debt relief options to deal with job loss, unexpected medical bills or other financial difficulties. Initial consultations with seasoned bankruptcy lawyer Edward Shaw are always free of charge, and we have four offices to serve our clients: in Ann Arbor, Novi, Livonia and Plymouth. Contact us today to make an appointment.
Some Essential Information About Chapter 13 Bankruptcy
Chapter 13 bankruptcy is sometimes called the "wage earner's bankruptcy plan" or the "debt reorganization bankruptcy plan." When you file for Chapter 13 bankruptcy, you do not have to relinquish any of your property to your creditors. However, you also do not receive a complete discharge of your debt.
Chapter 13 bankruptcy is frequently used as a strategy to help families fight back against foreclosure proceedings.
Instead, you must propose a plan under which you will use some of your income to repay some or all of what you owe your creditors over a period of time. The period of time varies depending on your income and is usually between three and five years.
Even though there is no official qualification test for Chapter 13 bankruptcy, it is not the best choice for everyone. If your income varies by month or is very low, the court may not approve a repayment plan. Chapter 13 bankruptcy is also not available to debtors whose debts are extremely high.
For more basic information about Chapter 13 bankruptcy, visit our Chapter 13 Bankruptcy Information Center.
Get Help Today - Contact The Shaw Group for a Free Consultation
Bankruptcy may or may not be the best way for you to get relief during a financial crisis. Talk to a trustworthy and experienced bankruptcy lawyer to find out all the facts before you make a decision.
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