If you or a loved one is facing bankruptcy, you probably have lots of questions. Will you lose your home? How will your credit score be affected? What can you do to repair your credit after you declare bankruptcy?
To help you get informed on some of the most common issues involved in bankruptcy litigation, the law offices of Metro Detroit, Michigan bankruptcy attorney Shirley Horn has compiled the following list of frequently asked questions.
- What is Chapter 7 Bankruptcy?
- What is Chapter 13 Bankruptcy?
- How Often Can I File for Bankruptcy?
- Does a Divorce Protect Me From Joint Creditors with My Ex-Spouse?
- How Long Will a Bankruptcy Remain on My Credit Report?
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.
Contact Our Detroit, Michigan Bankruptcy Attorney Today
If after reading these questions and answers you still have questions about bankruptcy or need legal representation or advice from an experienced Detroit, Michigan bankruptcy attorney, call Shirley Horn today at 248-398-9900 or complete the contact form on this website to schedule a free and confidential consultation.
We serve bankruptcy clients in Oakland County, Wayne County, and Macomb County. Our office is conveniently located in Royal Oak, with close access to Madison Heights, Sterling Heights, Lathrup Village, Huntington Woods, Southfield, Berkley, Ferndale, Oak Park, Birmingham, Farmington, and Farmington Hills.