How to File for Bankruptcy in Michigan
Filing for bankruptcy in Michigan will require the same steps as filing for bankruptcy anywhere else in the United States. Of course, it is always helpful to become familiar with the local laws and rules that are applicable in the state of Michigan before filing any paperwork with a local court. One of the first choices that a person filing for bankruptcy must address is the type of bankruptcy to file under. Most people will petition to have debts discharged under Chapter 7 bankruptcy. People with the means to potentially pay off debts over time will likely qualify to file for Chapter 13 bankruptcy. There is also a special form of bankruptcy called Chapter 12 bankruptcy that is reserved for fishermen and farmers. Debtors with high debt amounts or business debts may qualify for Chapter 11 bankruptcy.
Each debtor will need to submit a means test to the court to determine which form of bankruptcy is appropriate. A means test takes into account factors like assets, income, liabilities and more to paint a picture of a filer’s financial outlook. The test ultimately determines whether or not a debtor is capable of paying back any debts.
Starting the Bankruptcy Process in Michigan
It is necessary to file a petition with the court in Michigan to get the ball rolling on officially filing for bankruptcy. An automatic stay goes into effect once a petition is filed. An automatic stay prevents any creditors from contacting the person filing for bankruptcy or attempting to collect any unpaid debts. However, the process of filing for bankruptcy in the state of Michigan must begin long before a petition is filed with a court. Anyone interested in filing for bankruptcy must actually complete a credit counseling course in the six months leading up to filing a petition. In addition, a debtor education court must be completed once the bankruptcy process has been initiated. Both courses must be taken through agencies that are approved in the state of Michigan. The list of approved providers of credit counseling courses can be found here. The list of approved providers of debtor education courses can be found here. One of the final steps of the bankruptcy process is something called a meeting of creditors. This is a mandatory meeting that anyone filing for bankruptcy must attend. The meeting is usually brief and uneventful. However, it does serve as an opportunity for creditors to attempt to prove that there are nonexempt assets that can be collected or object to the details of a payment plan.
The Specifics of Filing for Bankruptcy in Michigan
Michigan’s bankruptcy court is split between the United States Bankruptcy Court for the Western District of Michigan and the United States Bankruptcy Court for the Eastern District of Michigan. Courts under the United States Bankruptcy Court for the Western District of Michigan are located in Grand Rapids, Marquette, Kalamazoo, Lansing and Traverse City. Courts under the United States Bankruptcy Court for the Eastern District of Michigan are located in Bay City, Detroit and Flint. Forms that can be used when filing for bankruptcy in the state of Michigan can be found here. The cost to file for Chapter 7 bankruptcy in Michigan is $335. The cost to file for Chapter 13 bankruptcy in the state of Michigan is $310. A list of fees that may be encountered when filing for bankruptcy in Michigan can be found here.
It’s extremely important to fill out all paperwork that is submitted to the court accurately and honestly. Any attempts to hide or misrepresent financial facts could result in penalties. Working with an attorney is highly recommended to avoid any filing errors that may result in delays, extra fees or penalties.