“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 13 bankruptcy filings work in Michigan? Read more about filing for bankruptcy on our website.
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