Bankruptcy is a legal procedure allowing a person or business to have their debts absolved, in part or in whole. It is normally treated as a last resort, because, while it can prevent financial catastrophe, it has some huge long-term consequences. This warrants careful consideration of the costs and benefits. Being a creation of federal law, bankruptcy will go through federal courts. Accordingly, the process for filing for bankruptcy in Michigan is essentially the same as the process anywhere else in the United States. However, particular courts in Alpena, Michigan will have particular rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Alpena, Michigan
There are 2 main forms of bankruptcy in Alpena, Michigan. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 involves liquidation of part of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This normally includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is absolved. But some forms of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Alpena, Michigan debts are not dischargeable, you may want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Alpena, Michigan
Chapter 13 Bankruptcy in Alpena, Michigan is very different from Chapter 7. Whether or not it is a better option is very dependent on the facts of each particular case. Chapter 13 does not absolve debt, but restructures it instead. Normally, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is normally manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Alpena, Michigan
This depends entirely on the facts of your individual case. If you have a decent amount of stable income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 may be the best option for you. If most of your property is exempt, and you don't have much stable income, Chapter 7 might be the best option.
In any case, you should talk with a local Alpena, Michigan bankruptcy lawyer. Your lawyer can advise you of your options and inform you of their likely outcome. This will make it much easier for your to make an informed choice.