Chapter 13 Information Center

Southfield, Michigan Bankruptcy Lawyers

If you fear that filing for Chapter 13 bankruptcy will represent a permanent black mark on your credit record, we urge you to learn more about the benefits of Chapter 13 from a bankruptcy lawyer at Acclaim Legal Services, with law offices in Southfield and Flint, Michigan. Our bankruptcy attorneys can show you that there is light at the end of the tunnel, and help you get there with your financial standing restored.

Did you lose your job unexpectedly and fall behind on your mortgage and are now facing a foreclosure? Have huge medical bills made paying for life's basic necessities impossible in the foreseeable future? Are you facing a vehicle repossession or utility shut-off? Are your creditors harassing you and threatening to initiate a wage garnishment? Contact our law firm for a free initial consultation to discuss your situation, and we will tell you if a Chapter 13 bankruptcy is the right option for you.

Chapter 13 - An Overview

The bills are stacking up, demanding calls and letters are arriving with increasing frequency and despite the best of efforts, the overdue debts just cannot be paid. In such cases, filing bankruptcy under Chapter 13 of the Bankruptcy Code may provide a solution to what seems like an insurmountable problem. Once considered a last resort, bankruptcy has evolved into an accepted method of resolving serious financial problems. If you are facing serious financial challenges, it is important to seek the counsel of an experienced bankruptcy attorney to determine whether filing under Chapter 13 is right for you.

Bankruptcy law provides two basic forms of relief: (1) liquidation and (2) rehabilitation or reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. A reorganization or rehabilitation bankruptcy under Chapter 11 or 13 of the Bankruptcy Code is, however, the option often preferred by the courts. Under Chapters 11 and 13, creditors may be provided with a better opportunity to recoup what they are owed.

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Alternatives to Filing Bankruptcy

Debtors who have faced obstacles to paying off their debts when due have no doubt received more than their fair share of demanding letters and phone calls, and the thought of filing bankruptcy and getting rid of their debts, and thus the constant demands, can be quite appealing. Before making a decision to pursue that route, which can have long-term effects on credit rating and the ability to make large purchases, debtors may wish to consider other, less drastic alternatives. Talking through these options with an experienced bankruptcy attorney can help make sense out of the myriad complex and confusing choices that must be made at an already stressful time.

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Debts that Remain After a Chapter 13 Discharge

A Chapter 13 discharge affects only those debts provided for by the plan. Any debts not provided for in the plan will remain, and the debtor will have to pay them in full, even after discharge. Additional exceptions to a Chapter 13 discharge include, generally, claims for spousal and child support; educational loans; drunk driving liabilities; criminal fines and restitution obligations; and certain long-term obligations, such as home mortgages, that extend beyond the term of the plan. A lawyer experienced in bankruptcy law can explain which debts are “erased” as a result of a Chapter 13 discharge and which will remain the obligation of the debtor.

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Effects of a Salary Increase on a Wage-Earner Plan Under Chapter 13

When a Chapter 13 debtor enters into a wage-earner plan, he or she commits the next three years’ disposable income — that portion of the debtor’s income not required to meet the necessary needs of the debtor and his or her dependents — to the repayment of debt. Often, a debtor’s income will increase after the plan is in place, and the question arises as to what becomes of this increase in income. Bankruptcy lawyers can answer these and other Chapter 13 questions as they arise, providing information, reassurance and competent and zealous advocacy throughout the bankruptcy process.

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Rebuilding Your Credit After Bankruptcy

Bankruptcy has a long-lasting impact on a person’s credit rating, and on his or her ability to obtain credit in the future. The impact is not entirely negative. In some cases, filing bankruptcy may actually improve a bad credit rating. In addition, there are a number of steps a person can take to improve his or her credit after bankruptcy. An experienced bankruptcy attorney can offer valuable advice about how credit can be improved after a bankruptcy, and how to work for a better financial future.

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