Bankruptcy in Michigan assists consumers in settling debts. It is more conducive to debt elimination than debt consolidation loans, which add more interest overall. Through these chapters, the consumer qualifies based on their income. For example, consumers with an income that is below the median do not have the option to file chapter 13 as it requires them to have a higher income. All consumers who wish to undergo this process must first complete a credit-counseling course that is approved by the state of Michigan. Any consumer who is ready to file a claim should contact a bankruptcy attorney in Grand Rapids MI.
Filing Chapter 13 in Michigan
The first step for filing chapter 13, after the consumer passes the means test, is to submit a repayment plan. This repayment plan must include a structure that will allow the consumer to pay off their debts within no less than three years. It should also include all expendable income generated by the consumer during this three-year period.
Michigan allows a homestead exemption for the consumer’s primary residence. It can prevent foreclosure and afford him or her with more time to settle their debts. Chapter 13 claims are available for up to five years. They also offer a higher probability of discharge for some debts such as credit card debts. Debts such as student loans provided by the government are not typically discharged unless they present a financial hardship for the consumer.
Court Requirements
In a chapter 13 case, the court will assign a trustee to acquire payments through the consumer’s employer. These payments are garnished prior to deductions in most cases. The court determines what portion of the remaining income is exempt based on household expenses. The consumer is required to utilize any additional income to pay unsecured debts that are not listed in the bankruptcy.
At any time that the consumer fails to comply with the bankruptcy requirements the judge can discharge their case. This will cause them to become immediately responsible for all debts. A bankruptcy attorney in Grand Rapids MI can assist consumers in this process to ensure compliance.
