Overwhelming debt, when you’re unable to make even minimum payments, takes over your entire life. It can lead to stress, insomnia, anxiety, and depression. Debt makes it impossible to enjoy life and can even make people feel hopeless about the future. There are dozens of reasons debt can overtake a person’s life, but the solution is always the same: filing bankruptcy. In Michigan, you can speak with an experienced bankruptcy attorney to determine if you qualify. They’ll explain how filing either Chapter 7 or Chapter 13 bankruptcy can change your life and give you a renewed hope for the future.
To get the most out of a consultation and check you have everything you need for the process, here are a few of the things you need to do before filing bankruptcy in Michigan.
Bankruptcy exists to give debtors a fresh start, so debt doesn’t consume their lives. However, it isn’t easy to file. Hiring an experienced bankruptcy attorney ensures you have everything you need to qualify and swiftly move through the proceedings. Debtors are responsible for collecting the required paperwork and documents to show bankruptcy is their only option.
Bringing all the required documents to your consultation ensures you’ll get the most out of your time with the attorney.
Once you have collected the paperwork, you’ll also have a better idea of your financial situation.
Before filing bankruptcy in Michigan for Chapter 7, debtors must complete a credit counseling course and show a certificate of completion to the court. The credit counseling company also helps to develop a debt repayment plan.
Credit counseling helps debtors understand their financial situation, how the repayment plan will get them out of it, and how to avoid similar circumstances in the future.
There are six chapters of bankruptcy, each for a unique situation, including for organizations, farmers, and servicemembers. For individuals, only two chapters of bankruptcy are relevant; Chapter 7 and Chapter 13.
Chapter 7 is also called liquidation. A debtor’s assets–those that don’t qualify for them to keep–are sold, and the cash value goes to paying off the individual’s debt. The court then discharges any remaining debts not covered by asset liquidation. The debtor is no longer liable for them.
Often, all of an individual’s assets will qualify for the exemption, resulting in a no-asset case, where liquidation is symbolic instead of literal.
For individuals with a regular income and substantial assets they wish to keep, Chapter 13 may be the better option. The debtor develops a three to five-year repayment plan to make payments on the debt, the terms of which the court will either accept or reject. At the end of the repayment plan, the court discharges the remaining debts.
Under Chapter 13, the debtor can keep their property. In many cases, more debts qualify for discharge, making it a better option for many people.
Our legal team has offices in Corunna and Flint and works with clients to file Chapter 7 and Chapter 13 bankruptcy. We’re experienced professionals who make sure people understand bankruptcy throughout the process. At James L. Gutting, we work alongside our clients to help them free themselves from overwhelming debt and get back to enjoying life. Start with a consultation and find out if you qualify for bankruptcy and what your next steps should be.
Reach out to James L. Gutting if you’re ready to deal with your debt and start living your life again by filing bankruptcy in Michigan.