Two different kinds of bankruptcy are possible for sole individuals in
Michigan: Chapter Seven bankruptcy and Chapter Thirteen bankruptcy. The
kind of bankruptcy for which to file will depend on each individual
circumstance. Factors will be taken into consideration. These include
the household income, the number of people living in the home, the
amount of debt at hand, past files of bankruptcy, the amount able to be
paid monthly, and others. Individuals have the right to file as a
single individual or through a joint bankruptcy as a husband and a wife.
Chapter Thirteen Bankruptcy
Chapter Thirteen bankruptcy allows individuals the ability to pay off
their debts on their own with the assistance of a payment plan. When
Chapter Thirteen bankruptcy is filed, the individual will receive help
in decided how much should be paid each month over a three-year or
five-year plan. This amount is generally one hundred sixty dollars or
greater. The time span for the payment plan will not exceed five years,
and monthly payment cannot be missed.
Chapter Seven Bankruptcy
Chapter Seven bankruptcy is available to help individuals who are deep
in debt eliminate creditors and pending foreclosures in a three-month
time span. Under this form of bankruptcy property will be sold and the
funds acquired will be used to pay off creditors. Chapter Seven
bankruptcy is for those who have the inability to pay one hundred
dollars a month towards debts.
The court will have legal control of the property and debt that is not
found in the Michigan list of exemptions. A trustee will be assigned to
the case and will see that all the necessary property is sold and all
the creditors paid in full. Trustees are paid in commission from the
value amount acquire through the exempt property. If the designated
property will not acquire much value, it can be excluded, even if not
Creditors and trustees have a sixty-day window where they may challenge
an individual's discharge right. A notice will follow if no challenges
have been presented, and all debts will be discharged in a minimum of
three months and a maximum of six months. Some debts, however, are not
dischargeable under any circumstances, like student loans.
Exempt Property in Michigan
Michigan has different categories for which items can be exempt and are
sorted by the amount of their worth. Federal exemption statutes can be
used instead of Michigan exemption statutes, upon the individual's
request. Equity is subject to coverage by exemptions if the loans are
secure. If the loans are not secure, the asset will be liquidated and
all assets will be further distributed. In order to keep any property
that has been deemed non-exempt, the individual must provide the value
for which the item would otherwise be sold.
Different forms of property can be exempt from sale. Such things can
include disability insurance, life insurance, real estate property to
thirty-five hundred dollars, business partnerships, most pensions,
furniture up to one thousand dollars, different forms of livestock,
some public benefits, motor vehicles, and some forms of stock.