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. Since it's a creation of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Michigan will be the same as everywhere else in the country. Particular courts in Highland Park, Michigan will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Highland Park, Michigan
There are 2 common forms of consumer bankruptcies in Highland Park, Michigan: 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 the non-exempt property is sold, the rest of the dischargeable debt is cleared. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Highland Park, Michigan is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Highland Park, Michigan
Chapter 13 Bankruptcy in Highland Park, 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 Highland Park, 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.
Regardless of your situation, you should speak with an attorney in Highland Park, Michigan who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely outcomes of each one, allowing you to make a much more informed decision.