Monroe, MI Bankruptcy Law Firms & Lawyers

There is no easy answer to the question of "which chapter of the bankruptcy code is best". Each chapter has its own distinct purposes and each had different benefits. The best way to answer which chapter is best for you is to consult with an experienced bankruptcy attorney. With that said, I can make some assumptions. Assuming you have a mortgage on your house and you are behind on the mortgage, then Chapter 13 has some benefits, such as the ability to "catch-up" on past due mortgage payments (or car payments) over the course of the Chapter 13 plan. Chapter 13 also allows a debtor to, under very specific circumstances, avoid a junior mortgage all together. With that said, you should understand that assuming you are not behind on the mortgage, and assuming you have a recorded homestead (or have a relatively small amount if equity in the house) it is quite likely that you can keep your residence even in Chapter 7.

It is nearly impossible to give someone advice about what the best option might be in an online forum. And you are asking multiple complex questions. Stick to asking one question per post and keep it simple. Your reasoning and proposals, such as paying off your car loan seem peculiar to me. Having a car loan is probably the best deduction you can have when you file a bankrutpcy.

Forgiveness of debt is taxable. They will probably send you a form 1099 reporting it as income to the IRS. It will be difficult to get another mortgage.