Types of Bankruptcy
Most people considering a bankruptcy will file either a Chapter 7 or Chapter 13 case. In 2009, 99 percent of the total of all bankruptcy cases filed in the federal court for the Eastern District of Michigan were either filed under Chapter 7 or Chapter 13.
Attorney Scott Zochowski is experienced in representing bankruptcy clients in Chapter 7 and Chapter 13 cases. Scott is admitted to practice bankruptcy law in several jurisdictions, but the majority of his work is focused in the United States Bankruptcy Court for the Eastern District of Michigan. That court serves southeast Michigan, including Metro Detroit (Macomb County, Oakland County, and Wayne County) and Port Huron (St. Clair County).
Chapter 7 – Fresh Start
If your goal is to be debt free as quickly as possible, filing for Chapter 7 bankruptcy may be the solution. Chapter 7 allows you to start fresh without any repayment plan. It eliminates many types of debts, such as credit cards and medical bills. A Chapter 7 bankruptcy lasts a minimum of around 4 months start-to-finish. Either an individual or a business may file a Chapter 7.
Chapter 7 is the most common form of personal bankruptcy in Michigan. In 2009, approximately 81percent of the total of all bankruptcy cases filed in the Eastern District of Michigan were filed under Chapter 7.
Not everyone is eligible to file for Chapter 7 bankruptcy. Please contact our office for a free consultation in order to discuss whether seeking relief under Chapter 7 of the Bankruptcy Code will accomplish your goals of eliminating your debt while protecting your assets.
Chapter 13 – Repayment
Only an individual may file a Chapter 13. If you are not eligible for a Chapter 7 bankruptcy, if you are in mortgage foreclosure, or if you have more than one mortgage on your home, Chapter 13 bankruptcy may be an option. Essentially, Chapter 13 allows you to pay back some or all of your debts through a restructured payment plan. Late payment and other fees are often waived and interest rates reduced. Steady income is necessary to fund the repayment plan. Chapter 13 is often called a “wage earner plan” bankruptcy.
The United States Bankruptcy Code gives you a maximum of five years to pay back your creditors by using any future income you receive.
In 2009, approximately 18 percent of the total of all bankruptcies filed in the Eastern District of Michigan were filed under Chapter 13. However, Chapter 13 Trustees report that as many as 2 out of every 3 cases filed are not successful. Please contact our office to discuss your rights under Chapter 13.
Chapter 11 – Reorganization
Chapter 11 is usually filed by a business, but can also be filed by a very small number of individuals who have extraordinary amounts of personal debts.
Businesses that are still somewhat profitable may consider filing for Chapter 11 bankruptcy. This plan allows companies to continue to operate and function normally while they follow a debt repayment plan. If the company is still profitable, there is a better chance that the creditors will be repaid and workers will be able to keep their jobs.
In 2009, less than 1 percent of the total of all bankruptcy cases filed in the Eastern District of Michigan were filed under Chapter 11 of the Bankruptcy Code. A very large number of those cases are not successful. Our office does not currently represent debtor clients in Chapter 11 bankruptcies.
The experience, knowledge, and understanding you can trust
To arrange a free consultation, please contact our Port Huron office at 810–479–0625 or our Metro Detroit office at 248-548-6800. Let us sit down with you and listen. We are here to provide you with the personal legal care you deserve.
Serving clients in Port Huron and Metro Detroit.