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 Trenton, Michigan will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Trenton, Michigan
There are 2 common types of consumer bankruptcies in Trenton, 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 absolved. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, basic personal items, and retirement accounts.
Once the qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some types of debt, however, can't be absolved in Chapter 7 Bankruptcy in Trenton, Michigan. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Trenton, Michigan
Chapter 13 bankruptcy in Trenton, Michigan is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. 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 Trenton, Michigan
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your particular situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.
Whatever your situation, you should speak with a local Trenton, 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.