What is Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy, also called straight bankruptcy, is a liquidation proceeding. In Chapter 7, a debtor (party who owes a debt) turns over all non-exempt property to a bankruptcy trustee, who then converts the property to cash so it can be distributed to the debtor’s creditors (parties who are owed money).
What is Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy, also known as a reorganization bankruptcy or a wage earner’s plan, may be filed by individuals who want to pay off their debts. In a Chapter 13 bankruptcy reorganization, individuals may protect and keep non-exempt property then have three to five years to pay off their debts under the repayment plan.
How Often Can I File for Bankruptcy?
Chapter 7 can be filed every eight years from an earlier Chapter 7 filing or six years from a prior Chapter 13 filing. Chapter 13 can be filed two years from another earlier Chapter 13 filing or four years from a previous Chapter 7 filing.
Does a Divorce Protect Me From Joint Creditors with My Ex-Spouse?
No, it does not. If you and your ex-spouse are co-signors on a debt acquired while married, the creditor can come after you for the entire payment of that debt from you, even when the divorce decree assigns the full debt to your ex-spouse.
How Long Will a Bankruptcy Remain on My Credit Report?
In Michigan, a Chapter 7 bankruptcy can remain on your credit report for up to 10 years from the date the bankruptcy was discharged. A Chapter 13 filing remains on your credit report for seven years from the date of discharge. However, you can usually recover within a couple of years. This depends on what debt you continue to pay, and the establishment of credit. Further, Bankruptcy may actually improve your credit by reducing the debt-to-income ratio.
In these tumultuous and uncertain financial times, millions of Americans just like you have lost their homes to foreclosure. A foreclosure is a legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property as a result of the owner’s inability to pay the mortgage. Foreclosure can have a devastating effect on your credit score and force you to find a new place to live, often with a large black mark on your credit score which can make it difficult to do so.
In a foreclosure, a mortgagee or other lien holder, usually a bank or lender, obtains a court-ordered termination of a mortgage holder’s rights to the property. A lender usually obtains a security interest from a borrower who mortgages an asset such as a house to secure the loan. If the borrower is later unable or unwilling to repay the loan, the house or other security interest used to secure the loan may be taken and used to repay the debt.
Generally speaking, the only way to stop a foreclosure to save your home through bankruptcy is through a Chapter 13 bankruptcy. A Chapter 13 Bankruptcy can be filed at any time prior to the date of the foreclosure sale, and it is often the only avenue to save your home from foreclosure. Consultation with an attorney to determine if this is a feasible option for you is critical.
Repossession (vehicle, automobile, car, truck, motorcycle, boat)
Chapter 13 Bankruptcy is a means to avoid a repossession or force the return of a vehicle after repossession.
Repossession is the taking back of an item that has been sold on credit and delivered to the purchaser because there has been a default. This generally occurs where personal property such as a car or motorcycle is taken back by the creditor due to missed payments. A repossession certainly can have an immediate effect on your personal, professional, and financial stability as we are reliant on vehicles for work, groceries, etc. On top of damaging your credit, creditors will generally sell the repossessed item. To the extent they do not receive the full amount owing, they can try to collect the difference from you.
Without a bankruptcy, typically the only way to get a car back is to pay an amount owing to the creditor including all missed payments, late fees, and charges in one lump sum. Practically speaking, people are generally unable to come up with those types of funds. As a result, filing a Chapter 13 bankruptcy case may be the only avenue for you to re-obtain your vehicle or obtain relief from a threat of repossession. A Chapter 13 bankruptcy can be filed at any time prior to the creditor selling the repossessed item. With the filing, you are entitled to retrieve your vehicle. If your car, motorcycle, or other personal property has been seized, consultation with an attorney to determine if this is a feasible option for you is critical.
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