Filing Chapter 13 Bankruptcy is for people who have some discretionary income after their normal and usual monthly expenses are deducted from their normal monthly income. For this reason, a Chapter 13 is called a "Wage Earner Bankruptcy."

Monthly Payments with a Chapter 13?
The big difference between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy is that there are monthly payment plans created for the Chapter 13 debtor. Payments must be made to the Chapter 13 Trustee over a period of time (usually between three and five years).

What are these payments?
These payments are usually include some or all of your credit card debt, whatever you may be behind on your mortgage payment, and sometimes your car loans. This is a good way to stop foreclosure and save your house. It can also be used to stop creditor harassment. And, of course, all the Michigan bankruptcy exemptions still apply, so you can keep some or most of your stuff.

Wage Earner Bankruptcy
Chapter 13 of the Bankruptcy Code is designed to enable individual debtors — under Court protection and supervision — to apply a portion of future earnings to the payment of a portion of their debts over an extended period of time. The debtor is protected from creditors by an Automatic Stay while a plan of repayment is developed and carried out. It is similar to a Chapter 11 Business Reorganization. In fact, Chapter 13 is sometimes called "Consumer Debt Adjustment."

Chapter 13 was intended to give the wage earner a reasonable opportunity to arrange installment payments out of future income so that creditors would receive more money than they otherwise would receive in liquidation.

It helps to have a skilled Michigan bankruptcy attorney help you make your payment plan no more than you can afford for your Chapter 13 Bankruptcy filing.

More Chapter 13 Information
Chapter 13 Bankruptcy Checklist
Chapter 13 Bankruptcy Process