Bankruptcy: Chapter 13 Individual Wage Earners Plan in Lansing, Michigan
The purpose of a chapter 13 bankruptcy is to allow an individual debtor with a regular income pay back debts using their income and enabling a debtor to keep certain assets. A person who operates a small business as a sole proprietor may also file under this chapter.
Under a chapter 13 bankruptcy filing, the debtor must promptly file a repayment plan and obtain the court’s approval of the plan. Any creditor may object to the plan. The debtor, along with the appointed trustee, must work out any objections to the plan before the court will approve it. The typical repayment period of a chapter 13 is 3 to 5 years. The debtor makes regular payments to the trustee and the trustee distributes these monies to creditors according to the terms of the plan.
After completion of the plan, the debtor’s debts are discharged (with some exceptions) and the debtor is no longer obligated to pay them.