What is bankruptcy?
Filing for bankruptcy in Michigan will help you get rid of your debt (money you owe people) in just a few months. You can file for Chapter 7 or Chapter 13 bankruptcy. Whether you file for chapter 7 or chapter 13 really depends on your assets (the amount of money you owe and the total value of the things you own).
What is the difference between chapter 7 and chapter 13?
Declaring Chapter 7 bankruptcy is a liquidation, which means that you give up things you own (your assets) to someone (a trustee) who then sells them to the people you owe money. After this, you will no longer owe those people any money and they can no longer bother you. You will now be debt-free, getting a fresh start. In Chapter 13 Bankruptcy, you still owe people money, but you can pay it back over a 3-5 year period, and you also may not have to pay back some of the money.
The bankruptcy process is relatively simple, but the laws that control each step can be difficult to navigate unless you’re an expert in them yourself. We suggest that you meet with a lawyer to learn whether you should go through this process and how you can benefit from the lawyer’s help. At Adler Law Firm, we will meet with you for free to help you learn whether filing for bankruptcy is the best way for you to get rid of your debt. Just call us now at (248) 270-8223 for your free consultation to learn more about the process and whether filing for bankruptcy makes sense for you. If filing for bankruptcy the right decision, we will help you successfully file for bankruptcy in Michigan at an affordable rate without all the hassle.
The Michigan Bankruptcy Process
How to File For Bankruptcy In Michigan:
1. Figure out if filing for bankruptcy makes sense for you
In order to file for chapter 7 bankruptcy, you need to be earning below a certain amount of money each year to file successfully. Meeting with an attorney or legal expert will help you figure out if you should file for chapter 7 or chapter 13 bankruptcy.
2. Determine whether bankruptcy will get rid of your debt and choose what items you want to keep after filing
Certain kinds of debt (money you owe a creditor) are impossible to get rid of by filing for bankruptcy. We recommend that you look into whether filing for bankruptcy will help get rid of the debt you owe. Filing for bankruptcy does not get rid of the following types of debt:
- Most tax debts
- Student loans
- Child support and alimony
- Court fines & criminal restitution
- Personal injury cases that were caused by drunk driving or driving under the influence of drugs
- Any debt that was incurred through the act of fraud
When you file, you’ll fill out a form that asks whether you’d like to buy back property or things that you’ve already given people (garnishment) in exchange for money, continue the loan after filing, or give (surrender) it to the people from whom you have borrowed money. The court will sell many of your assets and give that money to the people you owe money. But don’t worry, you’ll get a fresh start in exchange. A qualified lawyer can help you keep your property so you can get your debts will be erased without losing your property.
3. Take a course on money management before and after filing
You’ll need to take 2 courses showing you are taking steps to better handle your finances. Here is a list of approved financial counseling courses in Detroit, Michigan. These courses can cost between $15-$35, but you can get the course fee waived if you cannot pay. You’ll also need to take a course after filing to show you are actively adding to your financial knowledge to avoid financial problems in the future.
4. Fill out and submit forms to the court closest to where you live
Find out the forms you need to file here. You’ll need to write where you currently live, where you’ve lived over the past 180 days, where your property and possessions are, and where you primarily work. Click here for a tool to help figure out where you need to submit your forms. If you live in Detroit, you’ll submit the forms to 211 West Fort Street Detroit, MI 48226.
5. Pay the filing fee to the court
You’ll need to pay a fee so the court can process your case. It currently costs $335 to file Chapter 7 and $310 to file Chapter 13. You’ll need to submit payment when you submit the forms. Can’t afford the fee? No worries! You can opt to pay this fee in four payments by filling out form 103A with an explanation of why you cannot pay now and a proposal for a payment schedule. Alternatively, you can fill out form 103B to waive the fee entirely. These forms are accessible on the court’s website.
6. Attend an appointment and argue against the court’s ruling if needed
You’ll go to a short meeting in court where an official called a trustee will ask you about the information you submitted, such as why you are filing for bankruptcy and questions about the money you owe people. The court may invite one of the people you borrowed money from to be questioned as well, but that probably won’t happen.
After this meeting, you can submit a motion or dispute claims before the judge decides on your case. You can potentially reopen your case later, but disputing claims before the case is over will make it more likely for your case to get approved.
7. Debts get erased!
Congratulations! If you’ve followed the above steps, the court will send out an order that legally doesn’t require you to pay back your debts to creditors and your creditors can no longer collect debt from you.
This process can be very overwhelming, so be sure to seek guidance from a qualified attorney in Michigan who will help you successfully navigate the bankruptcy filing process.