bankruptcy in Grand Rapids requires the consumer to attend a state-approved credit counseling program. This course presents them with concepts that allow them to manage their finances better in the future. It presents them with techniques to improve their credit rating and rebuild their credit after their bankruptcy is concluded. Although several chapters are available, chapter 7 and 13 are the most commonly used.
Eligibility for Bankruptcy in Michigan
The federal court requires all claimants who wish to file for any chapter of bankruptcy to pass the means test. In the state of Michigan, the claimant’s income should be above the median to qualify for chapter 13; the household median is $50,079. Any claimant with an income that is below this median may be eligible for chapter 7, if they have qualifying assets to utilize in the liquidation process.
Differences in Chapters
In bankruptcy, a homeowner can prevent foreclosure based on the duration of the case. Chapter 13 claims provide better protection against this legal action; chapter 7 only provides a temporary stay. Chapter 13 allows the homeowner to include the property in the claim and eliminate late charges and outstanding payments. It also provides them with more time to settle debts.
A chapter 7 bankruptcy case is over within six months, and debt settlement is almost immediate. Whereas a chapter 13 claim requires the claimant to utilize most of their income to settle debt, and the case lasts up to five years to conclude. As soon as the chapter 7 case is finalized, the consumer can begin a credit re-builder program repair their credit. Chapter 13 claimants are restricted from acquiring new lines of credit for years. This includes short-term loans for emergency situations.
As property is sold through chapter 7, the consumer will receive the exempt value for each property. Any exemption values addressed in chapter 13 are applied to the debts. Properties in which the mortgage value is less than the value for the property are not exempt in the claim. Higher equity values could have a detrimental effect on the chapter 13 bankruptcy in Grand Rapids.
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