Bankruptcy is a legal procedure allowing a person or business to have their debts discharged, in part or in whole. It is usually treated as a last resort, because, while it can prevent financial catastrophe, it has some major 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. Individual courts in Iron Mountain, Michigan will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Iron Mountain, Michigan
There are 2 main forms of consumer bankruptcies in Iron Mountain, 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 usually 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 excused. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Iron Mountain, Michigan is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Iron Mountain, Michigan
In Iron Mountain, Michigan, Chapter 13 is quite different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your particular situation. Chapter 13 Bankruptcy involves a court setting up an altered payment plan, which allows the debtor to pay off most or all of his debts over a longer 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 Iron Mountain, Michigan
This depends entirely on the facts of your particular 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, it would be a good idea to consult a local bankruptcy Lawyer in Iron Mountain, Michigan. Your Lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).