Types and costs of bankruptcy
Michigan consumers who are considering filing for bankruptcy might wonder what it will cost and whether it is the right choice for them. Depending on the situation, a person might file for Chapter 7, Chapter 12 or Chapter 13 bankruptcy. Each type has different filing fees, and if the debtor chooses to obtain legal representation, there will be attorney’s fees as well. Possible alternatives to bankruptcy include negotiating the debt with creditors and selling something of value to pay off bills.
Chapter 7 bankruptcy is the most common, and it is best for people who do not have any way to repay their bills and who are facing legal action. Filing fees for Chapter 7 are $335. This type of bankruptcy remains on a person’s credit report for 10 years.
Chapter 12 is for people who have family farms and a regular income. With this type of bankruptcy, the person works out a plan to repay creditors over three to five years. Filing fees are $275. Like a Chapter 12, a Chapter 13 involves working out a payment plan for creditors. Filing fees are $310, and it stays on a person’s credit report for seven years.
Even with a Chapter 7 bankruptcy, a person will still be able to keep some assets, and some people may be able to keep all their assets. While filing for bankruptcy with the assistance of an attorney may cost more, there are several reasons it may be preferable. Bankruptcy paperwork can be complex, and errors or missing information can delay the bankruptcy process. An attorney can also answer any questions and may also be able to review debt repayment options so that clients have a better idea as to whether bankruptcy is the best solution.