Due to the uncertain economy of the last several years, many hard-working, responsible people who never thought they would consider bankruptcy find themselves doing just that. The reality is that anyone can find himself facing job loss, overwhelming medical bills, or divorce. Those factors, together with the economic climate, can make it impossible to regain control of one’s financial situation without help. Our government has long understood this, and the Bankruptcy Code was created to help any American who needs and deserves a fresh start.
St. Ignace bankruptcy attorney J.D. Praasterink helps clients in Mackinac, Luce, and Chippewa Counties, as well as the rest of the Eastern Upper Peninsula to regain control of their finances with bankruptcies under Chapters 7, 11, 12, and 13 of the United States Bankruptcy Code.
J.D. offers free, no-obligation consultations to people who would simply like to learn more about their financial options as well as to those who are thinking seriously about bankruptcy.
There are four types of bankruptcy available to individuals, and each is known by the chapter of the Bankruptcy Code in which it is identified.
Chapter 7 is often referred to as “fresh start” bankruptcy, designed for debtors who do not have the ability to pay their existing debts. A “means test” exists to determine if a debtor’s situation qualifies for chapter 7.
Under chapter 7, you may claim certain of your property as “exempt,” and you are allowed to keep this property. Your case is assigned to a bankruptcy trustee who is authorized to liquidate any remaining property to pay your creditors. Many Chapter 7 cases turn out to be “no asset” cases, which means there is no non-exempt property for the trustee to take.
A successful Chapter 7 bankruptcy wipes the slate clean of your existing debts (with the exception of certain types of debt, including domestic support obligations, student loans, and others).
Chapter 13 is designed for individuals with regular income who can pay all or part of their debts over a period of three to five years. It is sometimes referred to as the “wage-earner’s plan.” Some people who don’t qualify for Chapter 7 may qualify for Chapter 13. A key advantage of Chapter 13 is that is it can stop a home foreclosure and allow for payment of mortgage arrears over the life of the Chapter 13 plan.
Under Chapter 13, the court must approve your plan to repay your creditors all or part of the money that you owe them using your future earnings. After completing the payments under your plan, your debts are generally discharged (forgiven) with the exception of those debts that are non-dischargeable under the Bankruptcy Code.
Chapter 11 is usually heard of in connection with the reorganization of a business, but is also available to consumer debtors. It is a complicated and expensive process. Chapter 11 is typically used only by those few individual debtors who don’t qualify for Chapter 7 or 13, but still require protection from creditors.
Chapter 12 is designed to permit family farmers and fishermen to repay their debts out of future earnings over time, and is similar to chapter 13. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family-owned farm or commercial fishing operation.
If you have financial worries, you know that ignoring them won’t make them go away. You can’t change your financial past, but gaining knowledge will give you power over the future. Contact St. Ignace attorney J.D. Praasterink today for a free consultation. Learn your options, access the support of a knowledgeable professional, and move forward with your life.