Areas of Practice
Royal Oak Chapter 13 Bankruptcy Attorneys
Is a Chapter 13 Bankruptcy the Right Choice For You?
Chapter 13 bankruptcy provides consumers with a way to consolidate debt under federal law and repay creditors all or a portion of what is owed over time. The idea behind chapter 13 is that the consumer makes sufficient income to pay all current living expenses (rent, food, car, utilities, etc.), but not enough to pay off all debts in full or comply with creditor's demands. In chapter 13, living expenses are paid first, then whatever is left over goes into the bankruptcy plan. The plan is not based on what you owe (in most cases), it is based on your ability to repay creditors. The calculation of your plan payments involves many variables, but most importantly, it is based on your income and expenses. Whatever is left at the end of the month goes into the plan, even if it only pays creditors pennies on the dollar. Chapter 13 can be particularly useful for consumers with assets over the exemption amounts, defaulted mortgages or other secured debts.
The Chapter 13 Process
In chapter 13, you must submit a plan in which you set out a budget detailing your take-home pay and monthly living expenses. Any excess income is paid to the bankruptcy trustee who then distributes money to creditors on a pro-rata basis. The plan lasts for 36 to 60 months, unless your debts are fully repaid in a shorter period of time. At the end of the chapter 13 plan, any amounts still owing on your unsecured debts are forgiven.
Chapter 13 Has Certain Advantages
Chapter 13 has certain advantages over Chapter 7 in consumer bankruptcies. The biggest advantage for many people is that Chapter 13 allows individuals an opportunity to keep their homes and avoid foreclosure. Also, a Chapter 13 bankruptcy may be the right choice if you have a stable income and were affected by a temporary financial crisis or illness.
We are a debt relief agency helping people file for bankruptcy relief under the Bankruptcy Code. Let us help you decide if bankruptcy is right for you.
For a free telephone consultation with one of our attorneys - call our offices in Royal Oak or contact us online with a brief description of your concerns.