How to File for Bankruptcy in Michigan

Michigan had the highest unemployment rate of any state in the union in 2009.  It is not surprising, then, that they have a high bankruptcy filing rate, as well.  For those considering that option, there are a number of requirements and options to consider.  The best way to find the advice they need is by consulting a bankruptcy attorney.  Their experience in this field and their commitment to their client make them the perfect representative to protect the filer’s rights and help ensure the greatest benefit.

Finding a Bankruptcy Attorney

Finding an appropriate bankruptcy lawyer takes a bit of research.  There are many attempting to take advantage of the great need for such attorneys at this time, so the debtor must be sure to do their own research, find positive recommendations from trusted sources such as their state bar association, and interview several possible candidates before choosing one.

Bankruptcy Options

One of the confusing elements of filing bankruptcy includes choosing one of the six types available.  However, only two are generally appropriate for an individual or couple filing for bankruptcy:

• Chapter 13, for those with enough disposable income to make smaller monthly debt payments and with property they do not want to lose to liquidation.  The bankruptcy trustee helps them reorganize their assets and obligations to devise a three- to five-year repayment plan.
• Chapter 7 is often best for those with few assets, if any, to be liquidated.  They can generally have most of their consumer debt discharged through this process.

Michigan Exemptions

Most Michigan residents choose Chapter 7 bankruptcy, as much as 84% in 2009.  That means that they hope to claim as many exemptions as possible to protect their property from liquidation.  Filers can choose either federal or state exemptions, although not a combination of the two.  State exemptions include:

Filing the Petition

After choosing the appropriate options and attending the required credit counselling sessions, the debtor and their attorney can file the bankruptcy petition.  The court will then put a stay on all collection efforts and the bankruptcy trustee will process the petition, conducting the required 341 meeting with creditors so that the debtor can answer all questions.  Barring any difficulties, the bankruptcy petition is granted and the filer is either substantially debt-free (Chapter 7) or has a repayment plan that fits their budget (Chapter 13).