Chapter 7 and 13 Bankruptcy Laws

Each year, thousands of people file for bankruptcy-the majority hardworking people who have hit tough financial times. An unexpected job loss, medical condition, or divorce is often the culprit. Since 1985, David L. Conklin PC has helped countless Michigan clients get a financial second chance through bankruptcy relief.

Chapter 7 Bankruptcy

Filing Chapter 7 bankruptcy is a fresh start. A Chapter 7 bankruptcy in Grand Rapids, MI is the most common form of bankruptcy for both consumers and businesses. By filing Chapter 7 bankruptcy, you may eliminate most of your debt including:

  • Credit card debt
  • Medical Bills
  • Judgements
  • Loans

You may also be able to keep your home or car by reaffirming the debts and keeping payments current. As part of the process, the debtor discloses all assets to the court. The debtor's non-exempt property is liquidated to pay all or some of his or her debt. Any debt that is not paid through liquidation is discharged and creditors may not continue in collection actions. Generally, few assets are actually liquidated in a personal Chapter 7 bankruptcy. There are usually more valuable assets when a business declares Chapter 7.

Bankruptcy laws may not allow for the elimination of certain debts including:

  • Homestead (with limits)
  • Some insurance policies
  • Household/personal property/family auto (with limits)
  • Social Security, unemployment, workers comp and other benefits
  • Trade tools
  • Military gear

Chapter 13 Bankruptcy: A Repayment Plan

A Chapter 13 bankruptcy enables you to consolidate your debt through a three or five year repayment plan. The court must approve the plan and you must meet income and other requirements for a Chapter 13 filing to be approved. The monthly payment amount and the length of the repayment plan are based upon:

  • Your monthly income
  • Your monthly expenses
  • Amount and nature of your debt

Under Chapter 13 bankruptcy you receive a discharge once your payment plan is completed. However, if you do not make your payments on time, your debts are not discharged and you may become liable for them, along with fines and penalties.

A skilled bankruptcy attorney can help you bargain for the elimination of late fees and fines and negotiate a much lower interest rate on your repayment plan.

Talk to a Grand Rapids bankruptcy lawyer. Call 616-942-0458 to talk to bankruptcy attorney Dave Conklin about your financial situation and concerns.