Why file Chapter 13 Bankruptcy

Why should you file Chapter 13 Bankruptcy in Michigan? It is a good idea if you have so much credit card debt and you don't qualify for chapter 7 bankruptcy.  One of the drawbacks is the cost of chapter 13 bankruptcies or the ability to refinance during a chapter 13 bankruptcies.

 Chapter 13 bankruptcy law is at times referred to as reorganization bankruptcy.  It’s uniquely different than Chapter 7 bankruptcy. In a Chapter 7 bankruptcy virtually all of your debts are extinguished. But, you must give up any belongings that aren’t exempt from seizure by your creditors. Under Chapter 13 bankruptcy law, you don’t have to forfeit any worldly property. But, you’re expected to utilize your income to pay off some or all of what you owe your creditors. Your payments to creditors are made over time, usually from three to five years. The time parameter hinges on the amount of your debts and income.

 People sometimes find it necessary to file bankruptcy again. The good news is you can file again; the bad news is you may want to wait a while. Under the new bankruptcy law, you can file a Chapter 7 bankruptcy eight years after you initially filed for Chapter 7.. You must wait four years to file for Chapter 13 bankruptcy again.

You can actually file for Chapter 13 even before the 4 year limit, but in this case you’ll have to pay back 100% of your debt over time. While this might not sound like an appealing option, it may be a useful approach for people attempting to save their home from foreclosure.

When Should You File

Whether to file bankruptcy is a personal decision that shouldn’t be taken lightly.  Should you decide to file bankruptcy you should be aware of the effects.  Here are some things to consider as you evaluate your financial situation.  You might file bankruptcy if:

 You wouldn’t be able to repay your debt within five years.

• You don’t have many assets or savings.
• Your wages are being garnished.
• You’ve had repossession.
• One or more of your debt payments are more than 30 days past due.

Chapter 13 bankruptcy allows you to keep your assets in exchange for setting up a repayment plan. An individual can file once every two years and the bankruptcy will appear on a credit report for 10 years.

Filing for bankruptcy will make loans more costly and may make unsecured loans impossible to obtain. Qualified retirement plan assets, such as 401(k)s, are protected under all bankruptcy filings, and assets of up to $1 million in IRAs are also protected.

In the end if you want to keep most all of your stuff you will file a chapter 13 Bankrutpcy. However, you work starts before you file by finding the right Michigan Bankruptcy Attorney. Fortunately for me when I filed Bankruptcy in Lansing I had done my research and met with several attorneys before I decided which one I would use. It was a pain but my attorney made me look at all aspects of bankruptcy before filing and this included an analysis of filing Chapter 13.