Kostopoulos Bankruptcy Law

Category: Chapter 13

How Much Does Chapter 13 Bankruptcy Cost in Michigan?

Posted on by Kostopoulos Bankruptcy Law

Because you’re already facing financial challenges when considering bankruptcy, it’s understandable that you’ll have concerns about expenses. Many filers ask the question: How much does Chapter 13 bankruptcy cost in Michigan?

Filing for Chapter 13 bankruptcy in Michigan costs $313 in court fees. Additional expenses include credit counseling fees, typically $20-$50, and attorney fees, which average between $3,000 and $4,500. These costs vary based on case complexity and attorney experience.

Continue reading “How Much Does Chapter 13 Bankruptcy Cost in Michigan?”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Chapter 13 Bankruptcy Costs in Michigan

How much does it cost to file for Chapter 13 bankruptcy in Michigan?
Filing for Chapter 13 bankruptcy in Michigan involves a court filing fee of $313. This fee is required at the time of filing the bankruptcy petition. In some cases, the court may allow the fee to be paid in installments. Additionally, there are costs for mandatory credit counseling and attorney fees, which can vary based on the complexity of the case and the attorney's experience. It's important to budget for these expenses when considering Chapter 13 bankruptcy.
How much debt is needed to file Chapter 13?
There is no minimum debt requirement to file for Chapter 13 bankruptcy in Michigan. However, there are maximum debt limits. As of 2023, unsecured debts must be less than $465,275, and secured debts must be less than $1,395,875. These limits are adjusted periodically. Chapter 13 is designed for individuals with a regular income who can afford to make monthly payments, so the decision to file should be based on the ability to adhere to a repayment plan rather than a specific debt amount.
How long does it take for Chapter 13 to be approved?
The approval process for Chapter 13 bankruptcy in Michigan typically takes between 30 to 60 days after filing. This period includes the time needed for the court to review the proposed repayment plan and for creditors to raise any objections. Once the plan is confirmed by the court, the debtor begins making payments according to the plan's terms. The entire Chapter 13 process, from filing to discharge, usually spans three to five years, depending on the repayment plan's duration.
What is the downside to filing Chapter 13?
One downside to filing Chapter 13 bankruptcy in Michigan is the impact on your credit report, as it remains for seven years. Additionally, the repayment plan requires a long-term commitment, typically lasting three to five years, during which the debtor must adhere to strict budgetary constraints. Failure to make payments can result in the dismissal of the case. Furthermore, while Chapter 13 allows for debt reorganization, it does not eliminate all debts, such as certain taxes and student loans, which must still be paid.

What is Cramdown in Chapter 13 Bankruptcy in Michigan?

Posted on by Kostopoulos Bankruptcy Law

Terminology in the legal world can sometimes seem odd, and a Chapter 13 bankruptcy cram down certainly qualifies. So, what is cramdown in Chapter 13 bankruptcy in Michigan?

In a Michigan Chapter 13 bankruptcy, a “cramdown” allows you to reduce the balance of a secured debt (like a car loan or investment property mortgage) to the current value of the collateral, potentially leading to lower payments and interest rates. 

Having practiced as a Michigan Chapter 13 bankruptcy attorney for over two decades, I’ve worked on countless cases to leverage cram down for the benefit of clients. In this article, I’ll review what cramdown means, the impact on secured loans, and the steps in the bankruptcy process.

Continue reading “What is Cramdown in Chapter 13 Bankruptcy in Michigan?”

Start Your Financial Reset
Embrace A Debt-free Future

FAQs About Cramdown in Chapter 13 Bankruptcy

What is a Chapter 13 cramdown?
A Chapter 13 cramdown is a legal process that allows debtors to reduce the amount owed on certain secured debts to the current market value of the collateral. For example, if you owe more on a car loan than the car is worth, the loan balance can be reduced to match the vehicle's value.

The remaining unsecured portion of the debt may be discharged at the end of the repayment plan. This process is available only under specific conditions and applies to depreciated assets.
What is the cram down rule in bankruptcy?
The cram down rule in bankruptcy permits debtors to adjust the terms of secured debts under a court-approved repayment plan. This typically involves reducing the loan balance to the value of the collateral, lowering the interest rate, or extending repayment terms.

The rule primarily applies in Chapter 13 bankruptcy cases and helps individuals manage debts tied to depreciating assets. Certain exceptions, such as loans on primary residences, limit its application.
What is the 910 day rule for cramdowns?
The 910-day rule prevents car loan cramdown for vehicles purchased within 910 days (approximately two and a half years) of filing for bankruptcy. Under this rule, the debtor must pay the full balance of the loan through their Chapter 13 repayment plan, regardless of the car’s current market value. This rule was established to protect lenders from significant losses on newer loans and leads to fair treatment in bankruptcy cases.
What is the difference between cram up and cram down?
A "cram down" reduces the amount owed on secured debts to the collateral’s value, benefiting debtors by lowering their financial obligations. Conversely, a "cram up" involves debtors restructuring payment terms to pay the full debt balance, often at more favorable terms such as reduced interest rates.

While cramdowns are more common, cram ups may be used when debtors seek to retain assets without reducing the principal owed. Both processes require court approval under bankruptcy law.
What liens can be crammed down in Chapter 13?
In Chapter 13 bankruptcy, certain liens on secured debts can be crammed down, meaning the loan balance is reduced to the collateral’s current market value. Examples include vehicle loans (if the car was purchased over 910 days before filing), rental property mortgages, and loans secured by furniture or equipment.

However, primary residence mortgages cannot typically be crammed down. The remaining unsecured portion of the debt may be discharged after completing the repayment plan, providing significant financial relief to debtors with depreciated assets.

What Are Chapter 13 Debt Limits in Michigan?

Posted on by Kostopoulos Bankruptcy Law

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?

Continue reading “What Are Chapter 13 Debt Limits in Michigan?”

Start Your Financial Reset
Embrace A Debt-free Future

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?

Posted on by Kostopoulos Bankruptcy Law

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.

Continue reading “Can Chapter 13 Stop Foreclosure in California?”

How to Qualify for Chapter 13 Hardship Discharge in Michigan

Posted on by Kostopoulos Bankruptcy Law

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.

Continue reading “How to Qualify for Chapter 13 Hardship Discharge in Michigan”

Start Your Financial Reset
Embrace A Debt-free Future

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?

Posted on by Kostopoulos Bankruptcy Law

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.

Continue reading “What Disqualifies You From Filing Chapter 13 in Michigan?”

Start Your Financial Reset
Embrace A Debt-free Future

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?

Posted on by Kostopoulos Bankruptcy Law

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.

Continue reading “Can I Rent an Apartment While in Chapter 13 in California?”

Start Your Financial Reset
Embrace A Debt-free Future

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?

Posted on by Kostopoulos Bankruptcy Law

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.

Continue reading “What Happens After Chapter 13 Bankruptcy Discharge in California?”

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

Posted on by Kostopoulos Bankruptcy Law

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

Posted on by Kostopoulos Bankruptcy Law

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.

Do you have a matter with which our lawyers can help you?

Get a Free, No-obligation Consultation