Chapter 13 Royal Oak Bankruptcy Lawyer | Reorganization Attorneys in Royal Oak

Chapter 13 Bankruptcy is referred to as a “reorganization” bankruptcy. This type of bankruptcy is similar to a debt consolidation plan and normally takes several years to complete before you receive a bankruptcy discharge (debt forgiveness). In a Royal Oak Ch. 13 bankruptcy, you will make payments to the Chapter 13 Trustee who will then make payments to your creditors pursuant to a plan you proposed and had approved by the Royal Oak Bankruptcy Court.

Your personal debts will mostly be made up of "secured" and "unsecured" debts. The bankruptcy code handles them differently. In a Oakland County Ch. 13 bankruptcy, you can choose to continue to make payments on "secured" debts for property that you want to keep.

Examples of typical Oakland County businesses where you might have entered into a "secured" loan agreement include:

There is no means test for chapter 13 like you have to pass to qualify for Ch. 7 bankruptcy. There will be a calculation of your 'disposable income' which will influence how much is paid to all of your creditors, including "unsecured" creditors. There is also a "liquidation test" required in order to qualify for a Chapter 13 bankruptcy. This basically requires that unsecured creditors receive more from the debtor in a Chapter 13 case than they would have in a Chapter 7 case. Your Royal Oak Bankruptcy Lawyer will examine these calculations for you and provide you with advice about the chapter(s) for which you will qualify.

Examples of Royal Oak area businesses where you pay by credit card or open a credit line and incur "unsecured" debts:

Depending on your personal debt and financial circumstances, there are advantages to filing a chapter 13 bankruptcy in the Michigan Bankruptcy Court. While both chapter 7 and chapter 13 bankruptcies allow you to reaffirm your secured debts and continue making payments, Ch. 13 also has the advantage of letting you catch up on past due payments by spreading them over several years. This can include late payments for your mortgage, car loans, and even taxes! Your Royal Oak Bankruptcy Attorney will give you the information on bankruptcy so you understand the advantages of Ch. 13 bankruptcy.

Michigan Mortgage and Foreclosure Lawyer

If you're behind on your mortgage payments, you have regular income, and want to keep your house, a chapter 13 bankruptcy might be the right answer. A chapter 13 bankruptcy will allow you to spread your past due mortgage payments over 3 to 5 years and consolidate some of your other bills as well.

Prior to bankruptcy, you might have difficulty getting your mortgage company or bank to discuss a loan modification or payment plan with you. As soon as you file bankruptcy, not only does your mortgage company or bank have to stop foreclosure proceedings, but they will be required to communicate with your Royal Oak Ch. 13 Bankruptcy Law Firm to discuss options for resolving your mortgage delinquencies.

Information about mortgages and mortgage payments is available by visiting the FTC's website.

Remember, you may live in any of these neighborhoods in Royal Oak, but mortgage trouble and foreclosures exist in all of them and shows no preference.

The Chapter 13 Plan

The main element of a Chapter 13 Bankruptcy is the Plan. An experienced Oakland County Bankruptcy Attorney will work with you to calculate all the debts that will be paid in the plan, plus the trustee's fee, attorney's fees, and applicable interest. All of this information is included in your proposed Chapter 13 Plan and submitted to the Bankruptcy Court for approval.

A confirmation hearing will be held. The trustee and/or some of the creditors may object to the plan. Most of these negotiations will take place prior to the confirmation hearing; your Royal Oak Bankruptcy Lawyer will negotiate on your behalf with the Trustee and the creditors to formulate a plan that will not be objected to by them. You will likely have to modify your original proposed plan.

The bankruptcy judge will have the final say as to whether or not your proposed plan is confirmed, even if there are still objections. A confirmed plan will bind the debtor and each creditor to payment plan set forth in the plan. Chapter 13 plans usually run from 36 to 60 months. At such time as a debtor has made all payments required under the plan and fulfilled all other obligations set forth in the plan, the court will grant a discharge to the debtor of all debts (as provided for in the plan).

There are many circumstances that can arise during the three to five years of a Chapter 13 plan: job loss, job promotion, marriage, divorce, new children, grown children going to college, etc. Chapter 13 plans can be modified during the course of the plan. Your Royal Oak Bankruptcy Lawyer will advise and assist you as these life situations occur.

Royal Oak Debt Relief Lawyers serve the Oakland County and Surrounding Areas

Serving clients throughout Southeastern Michigan, including Allen Park, Amherstburg, Ann Arbor, Birmingham, Bloomfield Hills, Dearborn, Dearborn Heights, Detroit, Detroit Metro, Eastpoint, Farmington Hills, Flint, Grosse Pointe Woods, Hamtramck, Lincoln Park, Livonia, Pontiac, Redford, Romulus, Royal Oak, Southgate, Taylor, Tecumseh, Warren, Waterford, West Bloomfield, Wyandotte, areas in the vicinity of Clinton TWP, Oakland County International Airport, Selfridge Air Force Base, and other communities in Oakland County.

Contact a Royal Oak Chapter 13 Bankruptcy Attorney for a free initial consultation.