Struggling with debt in Michigan can be overwhelming. If you have exhausted other options for alleviating it, you might have no choice but to consider filing for bankruptcy. Consider the debts that can and cannot be discharged.
Debts that can be discharged
When filing for personal bankruptcy, you want to ensure you have all the facts. Some people mistakenly believe they can file for Chapter 7 or Chapter 13 bankruptcy and have all of their debts wiped out. Unfortunately, that isn’t the case; only certain debts can be discharged. Your unsecured debts, which are those you don’t back by collateral, are those you can discharge. This includes credit card debt, medical debt and personal loans.
Debts that cannot be discharged
Secured debts are those that are backed by assets. They cannot be discharged through a bankruptcy filing, and what this means is that if you owe, you run the risk of forfeiting those assets unless you make timely payments. Debts, such as child support, alimony, many taxes, personal injury judgments against you and some student loans, cannot be discharged after you file for bankruptcy.
If you have debt that you’ve been unable to satisfy, it might be worth pursuing bankruptcy. Chapter 7 is appropriate for those who have little to no assets and lower incomes. With this option, a bankruptcy trustee is assigned to your case to liquidate your assets so your creditors can receive the proceeds. Your unsecured debts are discharged by the end of your case.
Chapter 13 bankruptcy is good for individuals who have the funds to repay their debts but need more time to do so. You are given a repayment plan of three or five years to repay, easing the burden.
Bankruptcy often carries a stigma; however, even responsible people can have serious debt. Going through this process can help you start fresh.