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Category: Chapter 13

What Are Chapter 13 Debt Limits in Michigan?

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Chapter 13 bankruptcy is an option to tackle crushing debt, but eligibility is a top factor. To qualify, filers will need to ask a crucial question: What are Chapter 13 debt limits in Michigan?

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FAQs About Michigan Chapter 13 Debt Limits

How Does Chapter 13 Work in Michigan?
Chapter 13 bankruptcy in Michigan allows individuals with regular income to create a repayment plan to pay off their debts over a period of 3 to 5 years. It helps protect assets from liquidation and provides a structured way to manage debts while keeping creditors at bay.
What Happens if You Incur Debt During Chapter 13?
If you incur debt during a Chapter 13 case in Michigan, you must notify the court and trustee. The new debt may be included in your repayment plan, but it could affect your monthly payment or require an amendment to your plan.
What Is the Debt Limit for Chapter 13?
In Michigan, the debt limits for Chapter 13 are $1,257,850 for secured debts and $419,275 for unsecured debts. If your debts exceed this amount, you may need to consider other bankruptcy options, such as Chapter 11.
How Much of My Debt Do I Have to Pay in Chapter 13?
In Chapter 13 bankruptcy in Michigan, the amount of debt you must pay depends on your disposable income, the type of debt, and your ability to repay. Typically, you will repay as much as you can afford considering allowable living expenses. Unsecured creditors may receive a reduced portion of what is owed.
What Is the Highest Chapter 13 Payment?
There is no set "highest" Chapter 13 payment, as payments depend on the debtor’s income, expenses, and the total amount of debt. The monthly payment is structured to fit the debtor's ability to repay while covering secured and unsecured debt. The court will adjust the plan based on financial circumstances.
Can You Make Too Much Money for Chapter 13?
While there is no income cap for Chapter 13, high earners may not qualify if their debts exceed the eligibility limits. In Michigan, Chapter 13 is available to those with less than $2.75 million in combined secured and unsecured debts. High income may also affect the payment plan and debt repayment terms.
What Are Other Eligibility Factors for Chapter 13?
Aside from having regular income and falling under the debt limit, filers must be individuals or married spouses. You must go through credit counseling within 180 days before filing your Chapter 13 petition, and you must wait at least 2 years or more after a previous bankruptcy case.

Can Chapter 13 Stop Foreclosure in California?

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If you’re facing foreclosure, you may be wondering: Can Chapter 13 bankruptcy stop foreclosure in California?

Yes, Chapter 13 bankruptcy can stop foreclosure in California. The automatic stay immediately halts foreclosure proceedings, and the structured repayment plan allows homeowners to catch up on missed mortgage payments over three to five years.

With decades of experience helping Californians protect their homes from foreclosure, I’ve assisted countless homeowners in using Chapter 13 to regain financial stability. Let’s explore how this process works and what you need to know to safeguard your home.

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How to Qualify for Chapter 13 Hardship Discharge in Michigan

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To qualify for a Chapter 13 hardship discharge in Michigan, you must demonstrate circumstances beyond your control that prevent you from completing the repayment plan, show that unsecured creditors have received payments equivalent to what they would have under Chapter 7, and prove that modifying your repayment plan is not practical.

At Kostopoulos Bankruptcy Law, we understand how overwhelming financial challenges can be. With decades of experience helping Michigan residents secure debt relief, we’ll guide you through the requirements and process for obtaining a hardship discharge in Chapter 13 bankruptcy. Let’s explore who qualifies, how to apply, and the benefits of this vital bankruptcy tool.

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FAQs About Chapter 13 Hardship Discharge in Michigan

What Happens if My Hardship Discharge Is Approved?
Your qualifying debts are discharged, and you are no longer obligated to complete your repayment plan.
Does a Hardship Discharge Affect My Credit?
Yes, like any bankruptcy discharge, it will impact your credit report, but it also marks the resolution of your case.
Can I File for Chapter 7 After a Hardship Discharge?
Yes, but you must wait the required timeframe before filing for another bankruptcy case.
What If I Anticipate Future Income Changes?
If your income improves, the court may modify your repayment plan instead of granting a discharge.
What Is the Difference Between a Hardship Discharge and Conversion to Chapter 7?
A hardship discharge ends your Chapter 13 case without further payments, while a conversion to Chapter 7 involves liquidating non-exempt assets to pay creditors.

Key Differences:





Eligibility: A hardship discharge requires proof of uncontrollable hardship, while Chapter 7 requires passing the means test.



Process: Conversion to Chapter 7 may involve a new trustee and additional court filings.



Debt Relief: Both options discharge unsecured debts but have different asset implications.
Can You Reopen a Closed Bankruptcy Case to Request a Hardship Discharge?
Yes, you can reopen a closed Chapter 13 bankruptcy case to request a hardship discharge by filing a motion to reopen with the court.

Steps to Reopen:

File a motion explaining why reopening the case is necessary.
Provide supporting evidence, such as proof of hardship.
Attend a court hearing to present your case to the judge.

What Disqualifies You From Filing Chapter 13 in Michigan?

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If you’re struggling with debt, you might wonder, “What disqualifies me from filing Chapter 13 bankruptcy in Michigan?” Here’s the concise answer.

Disqualifications for Chapter 13 in Michigan include exceeding debt limits, failing to complete credit counseling, insufficient income for a repayment plan, or prior dismissals within 180 days. Fraudulent activity or incomplete documentation can also lead to case denial.

Understanding the factors that may disqualify you from Chapter 13 bankruptcy is essential. With decades of experience assisting Michigan residents, Kostopoulos Bankruptcy Law can guide you through the process and help you avoid common pitfalls.

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FAQs About Chapter 13 Bankruptcy Disqualifications in Michigan

Can I file for Chapter 13 if I have irregular income?
Yes, but you’ll need to provide proof of consistent payments, such as contracts for freelance work or Social Security statements.
What happens if my debts exceed the limits?
You may need to explore Chapter 11 bankruptcy as an alternative.
Can I refile after a dismissal?
Yes, but you must wait at least 180 days if the dismissal was due to willful noncompliance or creditor relief from the stay.
What happens if I forget to include a debt?
Incomplete filings can delay your case or lead to disqualification. Always double-check your documentation.
Can I complete credit counseling after filing?
No, you must complete it within 180 days before filing and provide a certificate.
Can fraudulent activity during bankruptcy result in criminal charges?
Yes, in addition to case denial, fraud can lead to fines or imprisonment.
Are there penalties for filing multiple times in a short period?
Yes, frequent filings may result in dismissal or restrictions on refiling.

Can I Rent an Apartment While in Chapter 13 in California?

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Yes, you can rent an apartment while in Chapter 13 bankruptcy in California, but there are a few key factors to keep in mind. Your bankruptcy filing will appear on your credit report, and some landlords may hesitate to rent to you.

However, if you have a steady income and can demonstrate the ability to meet rent obligations, many landlords will still consider your application. It may help to look for individual property owners rather than large complexes, as they tend to have more flexibility. Be prepared to provide proof of income, a strong rental history, and possibly a larger security deposit to improve your chances.

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Frequently Asked Questions

Can I spend money during Chapter 13?
Yes, you can spend money during Chapter 13, but your disposable income is allocated to your repayment plan. Essential living expenses like rent, food, and utilities are allowed, but large or non-essential purchases may need court approval.
Can you get an apartment with a bankruptcy on your credit report?
Yes, you can rent an apartment with a bankruptcy on your credit report. Some landlords may be cautious, but providing proof of income, a strong rental history, and offering a higher security deposit can improve your chances.
How long do bankruptcies stay on your record?
A Chapter 13 bankruptcy stays on your credit report for seven years from the filing date. During this time, it may impact your credit score and rental applications, but responsible financial behavior can help you rebuild credit.
Can I convert from Chapter 13 bankruptcy to Chapter 7?
Yes, you can convert from Chapter 13 to Chapter 7 bankruptcy if you meet eligibility requirements, such as passing the Chapter 7 means test. Conversion may be beneficial if you're struggling with your Chapter 13 repayment plan. Court approval is required for the conversion.

Also, you can convert from Chapter 7 to Chapter 13 bankruptcy. You must meet the eligibility criteria, such as having a regular income to fund a repayment plan. This may be beneficial if you want to keep certain assets or catch up on missed payments.

What Happens After Chapter 13 Bankruptcy Discharge in California?

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After completing your Chapter 13 bankruptcy plan, the court issues a discharge order. This discharge releases you from personal liability for most debts included in or addressed by your repayment plan. Once discharged, creditors can no longer pursue any legal action or continue collection efforts for these debts, even if they were only partially paid under the plan. However, some exceptions exist for certain types of debts.

Completing a Chapter 13 bankruptcy is a monumental achievement that marks the beginning of a new financial chapter in your life. This comprehensive guide will walk you through everything you need to know about what happens after your Chapter 13 discharge, how to rebuild your financial life, and how to make the most of your fresh start.

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Can I Buy a Vehicle After Filing for Chapter 13 Bankruptcy?

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After filing for bankruptcy, it almost feels like all big purchases are off limits. After all, your finances just underwent an intense amount of scrutiny and passed through the ringer, so to speak. While bankruptcy can make it more difficult to purchase items such as a car or a home, it’s certainly not impossible.

Can I Get an Auto Loan with an Open Chapter 13 Case?

Those who are looking to purchase a new car with an active Chapter 13 case are able to get a car loan under certain conditions.

There are two options to purchasing a vehicle after Chapter 13:

  • Wait for your bankruptcy discharge which doesn’t occur until the end of your repayment plan
  • Request permission from your trustee to take out a car loan before your discharge

The first option may take longer, but the second one can be infinitely more difficult. Many lenders are hesitant to give you a car loan if they know you just filed for bankruptcy and there are companies just looking to scam you out of your money.

Tips to Getting a Car Loan While in a Chapter 13

  • Plan and budget. Make sure that a monthly car payment is within your budget and won’t affect your ability to pay your payment plan. Stick to a reasonable vehicle that is affordable.
  • Review the options at your own bank first. If they’re unwilling to lend to you, it’s time to do your research. An attorney can simplify the process for you and may be able to recommend a trusted lender. You should also research your options thoroughly before signing any papers; the last thing you want is more financial trouble.
  • Be aware of guaranteed loans despite credit scores, wire transfer requests, and requests for fees right when you sign up. You can also check with the Better Business Bureau for further verification.
  • Get approval from the court. After you have a car loan lender, it’s time to obtain approval from the bankruptcy court. They will assess your bankruptcy income, the amount of the loan you’re applying for, and whether you have the means to pay that loan back over time. The motion you file with the court will go further into detail regarding your loan and the car you wish to purchase.

Getting a Car Loan After Your Bankruptcy Is Done

In some cases, it may make sense to wait until after your bankruptcy is complete to get a new car. By waiting, you can use this time to rebuild your credit and save up for a down payment, which can likely qualify you for better auto loan terms.

We’re Here to Guide you

Life after bankruptcy can be intimidating, especially when you have plans to commit to a large purchase. Kostopoulos Bankruptcy Law has the resources to make this process as seamless as possible. Not only have we been named as one of the Top 100 Firms by the Debt Education and Certification Foundation, we offer legal counsel in English, Vietnamese, Spanish, and Greek.

Call our Oakland bankruptcy lawyers today to receive award-winning legal counsel while purchasing your post-bankruptcy vehicle!

Liquidation vs. Adjustment: How Chapter 13 & Chapter 7 Bankruptcy Differ

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Filing for bankruptcy is a serious step. Before you make the decision, you should know what option is best for you. By understanding the differences between Chapter 7 and Chapter 13, you can make an informed choice before filing for bankruptcy.

Not only does the chapter you select influence your immediate financial situation, but it can also effect you in the future. For this reason, it is helpful to know how the two main consumer chapters differ.

What are the main differences?

Chapter 7 is frequently referred to as liquidation bankruptcy, as property will be sold to cover debts. To qualify for Chapter 7 bankruptcy, an individual must be below a certain level of income. Choosing Chapter 7 is basically like scrapping everything and starting over. While you may be able to qualify for certain exemptions for your property, a good portion of it will be liquidated in order to pay off any undischarged debt. In order to have your debts paid off, you must essentially give your bankruptcy trustee permission to sell any non-exempt property and distribute the proceeds to creditors.

In contrast, Chapter 13 is much more focused on readjusting or reorganizing debts and payment plans, rather than paying them off with personal property. You will file a repayment plan in order to pay off either all or a portion of your debts over a designated time period.

How much debt you must pay off will depend on a few factors, such as:

  • Your income or salary
  • The amount of secured and unsecured debts involved
  • How much property or assets you own

You won’t have to liquidate any property in this type of bankruptcy plan, which means individuals can often avoid foreclosure and keep their homes when filing Chapter 13.

Take Steps Towards Financial Freedom

If you have questions about which chapter of bankruptcy is right for your financial situation or would like to learn more, be sure to contact Kostopoulos Bankruptcy Law today for counsel. We are Certified Bankruptcy Specialists and have assisted thousands of clients in the past!

Financial freedom is just a phone call away. Get in touch with our legal team today to discuss your case.

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