When someone files for bankruptcy in Detroit under Chapter 13 of the Bankruptcy Code, the objective should be to have the opportunity to repay debts in their name, in better terms, i.e. lower or no interest. Unlike Chapter 7 which involves the actual liquidation of assets, Chapter 13 involves restructuring debts which allows the debtor to use whatever income they may have in the future to pay off the creditors. Filing Chapter 13 Bankruptcy in Detroit is thus applicable for a debtor who has a regular income, and thus can afford to request for such adjustments or reductions.
The United States Bankruptcy Code gives the debtor a ceiling of 5 years, within which the creditors must be paid back. While the attorney will safeguard your interests, the entire process is carried out under the supervision of the courts. When you are faced with this situation, it’s best to leave the legal work to the experts, the Detroit bankruptcy lawyers.
While debtors are allowed to keep their property, the court does approve a new interest-free plan for repayment. The repayment must begin within 30 to 45 days the case has started. The transitory stage of paying a trustee who then pays a creditor, as in Chapter 7 Bankruptcy is usually eliminated with Chapter 13 Bankruptcy. Although, in some cases people may involve a trustee who would take care of disbursing money to the creditors as per the plan. Also, as per the law the creditors must strictly adhere the repayment plan approved by the court and are in fact prohibited to collect any claims from the debtor. Your attorney will prepare new repayment plan to best suit your situation.
The major advantage of Chapter 13 over Chapter 7 Bankruptcy is the full discharge option which is not applicable under Chapter 7 filing. Yet another advantage of the Chapter 13 filing is a repayment can be created even if creditors disagree with it, as long as it is approved by the Court. Although, in all fairness the court allows creditors also to file an objection, in case they may have any.
If you are faced with making a decision between Chapter 13 and Chapter 7, you can be assured we care. We provide a free bankruptcy evaluation. If you simply would like to ask a question concerning your particular case, you do this too by simply filling out our confidential question to the attorney form.