It’s hard staying competitive in today’s fast paced market and rising inflation costs. With Bed, Bath & Beyond closing its doors, it can be uncertain what the future will look like when it comes to shopping.
If you find yourself struggling to keep your business afloat, you may be asking yourself – “What’s the difference between chapter 13 and chapter 7 bankruptcy filings?”
“A chapter 7 bankruptcy case doesn’t involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds creditors in accordance with the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. The Bankruptcy Code will allow the debtor to keep certain "exempt" property; but a trustee will liquidate the debtor's remaining assets. Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property.”
“A chapter 13 bankruptcy is called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under chapter 13, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause." (1) If the debtor's current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. § 1322(d). During this time the law forbids creditors from starting or continuing collection efforts.”
Still have questions about how chapter 7 and chapter 13 bankruptcy filings work in Michigan? Pear Sperling Eggan & Daniels, P.C. represents debtors in Chapter 7 Liquidation and Chapter 13 Individual Reorganization Bankruptcy cases all the time.
If you need help filing for bankruptcy, consult a bankruptcy attorney in Ann Arbor for a free consultation on whether you qualify. (734) 665-4441
Resources:
American Bankruptcy Institute
https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics
https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics
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