A bankruptcy case is started by the filing of a petition with the bankruptcy court. The bankruptcy petition has to include a list of all of the debtor’s assets, liabilities and other information expressly required under the bankruptcy code. The debtor is not able to select which creditors to include on the bankruptcy petition, but that does not necessarily result in the debtor losing their home or vehicle. All creditors really need to be properly listed.
Debtors are able to submit petitions as an individual or as husband and wife. People that are married don’t necessarily have to file jointly if almost all the debts are solely in one of the married people’s names.
There are situations where individuals are forced into bankruptcy by creditors. The scenario is commonly refereed to as an involuntary bankruptcy proceeding. Generally speaking, involuntary bankruptcy proceedings are limited to business circumstances. Basically all consumer bankruptcies are filed on a voluntary basis.
About three-quarters of the cases seen at one Michigan bankruptcy law firm are Chapter 7 bankruptcies, with the other quarter filed under Chapter 13 of the code where the debtors make payments for three to five years.
The bulk of Chapter 13 cases are filed for debtors who want to avoid foreclosure or repossession. There are a couple of Chapter 13 cases that are filed due to the debtor’s ineligibility for Chapter 7 protection because of a previous Chapter 7 or because they have the ability to pay their creditors a substantial portion of what they owe. In some cases, a client chooses to file for Chapter 13 protection due to their desire to pay their creditors.
Under both a Chapter 7 and Chapter 13 bankruptcy proceeding, the creditor is stopped from taking actions such as a foreclosure or sheriff’s sale, utility shut-off, vehicle repossession or wage garnishment.
About the Author:
Debt problems? Learn your options. We offer FREE in-office consultations with experienced Michigan bankruptcy lawyers. This valuable legal advice only costs you a little of your time. Evening and Saturday appointments available!