In today's economy, it is no surprise that countless people have been severely impacted by uncontrollable debt. Whether a family is upside down on their mortgage or creditors won't stop harassing someone that owes a large amount of debt, a great number of people have decided to explore their options for relief. One of the most effective ways that a person may do so is to file for bankruptcy. Once this decision has been made, it may enable a person that is struggling under their finances to start fresh and work toward a successful financial future. What many seem to struggle with, however, is understanding what form of bankruptcy is right for them and what steps to take to initiate the process.
The two most common forms of bankruptcy are Chapter 7 and Chapter 13. Each one has its advantages and disadvantages, but the success of either one is really dependent on the circumstances of the individual that is looking into debt relief. Chapter 7 is a way for someone to essentially liquidate their assets and discharge their unsecured debt. In order to qualify for this type of debt relief, however, one must first submit to a means test—in which one's income and expenses will be examined. If it is determined that they are eligible to file for this form of bankruptcy, they will be able to gain fairly immediate relief from their overwhelming debt.
Chapter 13 differs from Chapter 7 in that debt relief is not as immediate. It is more of a gradual process that allows an individual to reorganize their debt and devise a payment plan that allows them to pay back their debt over a period of three to five years in monthly installments. As a result, a debtor may be able to keep their assets, fight the foreclosure of their home, and stop creditor harassment while they more easily pay back their debts. In order to qualify for this form of bankruptcy, however, one cannot have more than $360,475 in unsecured debts or more than $1,081,400 in secured debts.
If you are considering filing for bankruptcy but are unsure of what process is right for you, you should not hesitate to speak to a Michigan bankruptcy lawyer from our firm today. By enlisting the help of a legal professional, you will be able to better understand both the advantages and disadvantages to all available options. Making the right choice is crucial when the future stability of your finances is on the line, so it is important to be well-informed before making any decisions. Whether you have questions about the bankruptcy process or you would like to explore other alternatives, a knowledgeable attorney can guide you every step of the way.