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 product of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Michigan will be the same as anywhere else in the country. Particular courts in Inkster, Michigan will have some unique rules, however, so you should consult with a local lawyer before you file.

Chapter 7 Bankruptcy in Inkster, Michigan

There are 2 common types of consumer bankruptcies in Inkster, Michigan: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves liquidation of some 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 eliminated. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Inkster, Michigan is not dischargeable, Chapter 7 may not be the best option.

Chapter 13 Bankruptcy in Inkster, Michigan

In Inkster, Michigan, Chapter 13 is very different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your individual situation. Chapter 13 Bankruptcy involves a court setting up a modified payment plan, which allows the debtor to pay off most or all of his debts over a prolonged period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.

Which Type of Consumer Bankruptcy Should I File in Inkster, Michigan

The answer to this question depends heavily on your particular situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.

Whatever your situation, you should speak with a local Inkster, Michigan bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely outcomes, which will help you make a more educated decision.