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Filing for Chapter 13 Bankruptcy in Michigan

Starting Fresh with a Payment Plan

Chapter 13 of the U.S. bankruptcy code allows those going through financial hardship a road out by offering a payment plan over a period of three to five years. If you are struggling to cope or getting behind on your debt repayments and bills, bankruptcy can help you start over with a fresh outlook on your life and finances.

Very often a person is looking for a debt relief solution due to circumstances beyond their control - such as job loss, medical conditions, divorce, or the death of a spouse. While there are many alternatives to bankruptcy and it is not the best solution for everyone, learning more about the bankruptcy process from an experienced Michigan attorney can help you decide if a Chapter 13 bankruptcy is the smartest resolution for your specific situation.

Find out if filing for chapter 13 is the right answer to your financial issues. Reach out to Hensel Law Office, PLLC today at (888) 258-0651 to get started.

What is a Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, also known as a wage earner's plan or reorganization bankruptcy, allows debtors with a regular income to propose a 3 to 5 year repayment plan for all or part of their debts. Filing for chapter 13 can help debtors save their home from foreclosure, make up missed car payments to prevent a vehicle repossession, and more.

The amount to be repaid to creditors is determined as part of Michigan's Means Test. As long as the debtor can continue making payments under the repayment plan, any remaining dischargeable debt is discharged once the plan completes in 3 to 5 years.

Can I Keep My Assets in Chapter 13 Bankruptcy?

Unlike Chapter 7 where your non-exempt property may be liquidated, in a Chapter 13 bankruptcy, you keep your assets while a percentage of your future income goes towards paying off creditors in one combined payment. Your attorney works with you on your three to five-year plan, and then at a confirmation hearing, the court either approves or disapproves of the plan. The payment amount and time period depends on factors such as your income, property value, and your expenses.

Your payments will be made via a trustee who will oversee your bankruptcy case. In most cases, the trustee will allow you to set up an automatic bank draft from your bank account. Chapter 13 trustees do not check your monthly expenses or your expenditures that you make during your plan. This information would have already been noted at the time of filing, and the trustee can assume that these expenses will remain roughly the same unless you change your schedule.

Another added benefit to filing Chapter 13 bankruptcy is that many clients will experience relief from creditors contacting them regarding collection on a debt, as they will be barred from doing so. For many, this frees them from any sort of stress from creditor harassment and allows them the peace to think clearly about their lives again.

How is My Chapter 13 Payment Plan Calculated?

The amount of your plan payment during a Chapter 13 bankruptcy is dependent on several factors, including:

  • Your income
  • Your essential expenses and disposable income
  • Your debts
  • Where you live and own property

In determining the disposable income you have to pay off your debts, you will be able to deduct essential expenses for items such as:

  • Food
  • Housing
  • Utilities
  • Clothing
  • Taxes
  • Alimony and child support
  • Some education costs
  • Childcare
  • Healthcare

If your income is below Michigan's state median for your household size, you will not be required to calculate your monthly disposable income. Instead, you will create a repayment plan based on your budget.

Benefits of Filing Chapter 13 vs. Chapter 7

In addition to keeping your non-exempt property, Chapter 13 does have a number of benefits over Chapter 7.

If you have any personal loans with co-debtors, such as co-signers, creditors can typically seek to collect payments from them during a Chapter 7 bankruptcy. However, any co-debtors are protected from these collection efforts if you file for Chapter 13.

Additionally, while child and spousal support obligations cannot be fully discharged in any form of bankruptcy, they can be a part of the three to five-year plan with a Chapter 13 filing. This means you can pay these debts off over the duration of the plan.

Speak to a Chapter 13 Bankruptcy Attorney in Michigan

Here at Hensel Law Office, PLLC, I understand that struggling with your finances can be very stressful. I handle every aspect of your case, rather than ushering you through an assembly line of different attorneys for each phase of the process. You won't have to worry about having to tell your story to a multitude of legal professionals. I believe in treating every client with personal, individualized attention and care, using my knowledge and experience to help you take the necessary steps to get back on your feet.

My bankruptcy firm serves clients in Sterling Heights, Warren and various other parts of Michigan. Call (888) 258-0651 now to get started.

Client Testimonials

  • We have and will continue to recommend you to others in need of a fresh start.

    “Dear Tom, my husband and I wanted to express our deepest thanks for the help you gave us during our embarrassing and stressful time. I was very impressed that you returned every phone call in a timely manner. You were able to explain exactly what was going to happen in words that "we" could understand. You answered every question we threw at you. The whole bankruptcy process from start to finish was complete in the time you told us it would take. Your professionalism yet friendliness made the whole experience for us almost enjoyable... almost! We have and will continue to recommend you to others in need of a fresh start.”


  • Professional, competent, empathetic attorney.

    “My husband and I were forced into a position to file for Chapter 7 bankruptcy. We were devastated and mortified that we had to choose that route, but Tom eased our stress about the filing and court hearing process, as he thoroughly explained what Chapter 7 entails, as well as exactly what to expect during and after the filing process; he was accurate on each point that he advised us on. Tom also kept in frequent contact with us and responded quickly to any questions or concerns that we had while we worked with him. Tom's expertise and tact was invaluable for us, and we will absolutely recommend him to any of our friends and relatives that may find themselves in similar positions to ours. Thank you, Tom, for your dedicated help during this process.”


  • We couldn't have gotten through this difficult process without Tom.

    “We couldn't have gotten through this difficult process without Tom. We evaluated a number of bankruptcy attorneys and found Tom to be the most knowledgeable and compassionate. He takes the time to explain all aspects of the process and answers your questions thoroughly and promptly both in person and via email. He knows the law and ensures that you receive the best treatment possible depending on your particular situation.”

    T & J

  • You made a difficult experience so much easier.

    “Back a few years ago, you helped me through a bankruptcy. I still tell people how you made a difficult experience so much easier, with your clarity, support, and friendly approach to the law. I'm still very appreciative for all your help – it really helped to pull me out of a difficult place and put my life back on track.”


  • Thank you very much for getting us through this very hard time in our lives.

    “I just wanted to thank you very much, for getting us through this very hard time in our lives. You did an excellent job. If anyone I know is in need of a lawyer, we will surely give them your name. Again thanks.”

    John and Linda