Bankruptcy is a legal procedure allowing a person or business to have their debts excused, in part or in whole. It is typically treated as a last resort, because, while it can prevent financial catastrophe, it has some influential 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. Distinct courts in Richmond, Michigan will have some unique rules, however, so you should consult with a local lawyer before you file.

Chapter 7 Bankruptcy in Richmond, Michigan

There are 2 typical types of consumer bankruptcies in Richmond, Michigan: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is excused. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.

Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is absolved. However, some types of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Richmond, Michigan is not dischargeable, you might want to consider other options besides bankruptcy.

Chapter 13 Bankruptcy in Richmond, Michigan

Chapter 13 Bankruptcy in Richmond, Michigan differs considerably from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 does not absolve any debt, but it creates a new payment plan that should give the debtor some breathing room. Usually, all of the debts are consolidated into 1 periodic payment. While this might make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.

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

Chapter 13 is typically a good option for people who have a steady income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a steady income, Chapter 7 might be more beneficial.

Of course, you should always seek the counsel of an experienced local Richmond, Michigan bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your specific situation.