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Chapter 13 FAQ

Bankruptcy in Detroit: Chapter 13 FAQ

Our Detroit Chapter 13 Lawyer Has the Answers You Need

If you have missed payments on your home loan or fallen behind on other financial obligations, and you are looking for long-term debt relief, a Detroit Chapter 13 lawyer at Marshall D. Schultz can help you determine if bankruptcy is right for you. There are countless benefits of bankruptcy. Having a lawyer on your side that has a comprehensive understanding of bankruptcy laws and years of experience helping individuals get the fresh financial start they deserve, will greatly improve your chances of being able to avail yourself of those benefits.

Our firm will work hard to help you retain key assets and properties that you may otherwise be forced to give up. Our lawyers have more than 33 years combined experience practicing law and we have handled in excess of 10,000 bankruptcy cases. To help you determine whether Chapter 13 is right for you, here are some common questions and answers about Chapter 13 bankruptcy here in Detroit:

What is the difference between Chapter 7 and Chapter 13?

Chapter 7 is for those individuals who have an income below the median as verified through a Means Test, have little to no assets that can be liquidated and used to pay off past due loans, and who need a hand to get out of the unfortunate financial situation they have found themselves in. At the end of a Chapter 7 bankruptcy the majority of a person's debts will be discharged and he or she will be given a clean slate. Chapter 13 is an option for those individuals who either do not qualify for Chapter 7, or who have sufficient assets and property they would like to retain, while still being able to pay off delinquent debts and regain control of their financial situation.

Is Chapter 13 only for those individuals who don't qualify to file for Chapter 7?

Chapter 13 is not only for those individuals who do not qualify to file for Chapter 7. Chapter 13 offers a solution to debtors who may have fallen behind on their financial obligations. This type of bankruptcy is a viable way in which an individual can catch up on missed payments, pay off past due taxes without having to worry about additional interest being accrued, and still be able to retain all of his or her existing assets. Chapter 13 is also a proven foreclosure defense. Providing you have a stable and steady income, and that you have some level of disposable income which can be put toward your debt repayment plan, Chapter 13 can help you get caught up on your past due payments with a 3- to 5-year period and retain your assets. Any dischargeable debt not fully paid back by the end of your repayment plan will be released as per the terms of your bankruptcy agreement.

Will I lose all my assets and property when I file for Chapter 13?

Chapter 13 is the most feasible bankruptcy option for any individual wanting to retain possession of his or her assets and property. In Chapter 13 you do not discharge all of your qualifying debt; you simply restructure it so that it can be paid over a 3- to 5-year period. You will have a far greater chance of retaining your assets, avoiding foreclosure and maintaining your current lifestyle if you file for Chapter 13 rather than Chapter 7.

Is Chapter 13 the same as debt consolidation?

The primary difference between debt consolidation and Chapter 13 is that in a Chapter 13 bankruptcy creditors are required by the court to follow the terms laid out in the debt settlement agreement and repayment plan. In a standard debt consolidation, a creditor has no obligation to agree to the terms being proposed. Debt consolidation agreements can and will also include continually accruing interest, whereas no further interest will accrue during the course of a Chapter 13 repayment plan.

Which type of bankruptcy is better for my credit?

There is no specific bankruptcy that is "better" for your credit. Any type of bankruptcy will have a negative impact your credit score and remain on your credit report for between 7 and 10 years. While a Chapter 13 bankruptcy will remain on your credit report for less overall time than a Chapter 7 bankruptcy, a Chapter 7 will be completed in a matter of months not years. As soon an individual's debts are discharged in a Chapter 7, the process of rebuilding his or her credit can begin. In a Chapter 13, you will remain in bankruptcy until the terms of your repayment plan have been met.

Call a Detroit Chapter 13 attorney today!

If you or a loved one are considering filing for bankruptcy, a Detroit Chapter 13 attorney at our firm can help. We will be able to review your current financial situation, asset whether you meet the necessary qualifications to file for protection under bankruptcy laws and help you determine how to proceed. There are many situations that can cause an individual to fall behind on his or her debts. We are not here to judge you; we are here to provide you with the legal representation you need to overcome the financial obstacles you face so that you can get a fresh start. Contact our law firm today to find out what we can do for you.

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