How Do You File for Bankruptcy in Michigan?

Filing for bankruptcy in Michigan might feel overwhelming, but it’s a structured process designed to help you regain financial stability.

To file for bankruptcy in Michigan, complete credit counseling, gather financial documents, file a petition with the court, and attend required hearings. Both Chapter 7 and Chapter 13 offer unique benefits depending on your situation.

With decades of experience as a bankruptcy lawyer helping Michigan residents, I’ve guided countless individuals through bankruptcy to achieve financial relief. I’ll walk you through the essential steps to file for bankruptcy in Michigan and what you need to know to get started.

Step 1: Consult a Bankruptcy Attorney

Why it matters: A qualified bankruptcy lawyer can help you evaluate your financial situation, decide between Chapter 7 and Chapter 13 bankruptcy, and guide you through the filing process. While hiring an attorney is not mandatory, it significantly reduces errors and improves outcomes.

Key takeaway:* For personalized assistance, contact Kostopoulos Bankruptcy Law at 877-969-7482 for a free consultation.*

Step 2: Complete Pre-Filing Credit Counseling

What it involves:

Before filing, you must complete a credit counseling course approved by the U.S. Trustee Program within 180 days of your filing date.
This course evaluates your financial situation and explores alternatives to bankruptcy.

Important note: Upon completion, you’ll receive a certificate that must be submitted with your bankruptcy petition.

Step 3: Gather Financial Documents

To file for bankruptcy, you’ll need:

Income documentation: Pay stubs for the last 60 days and tax returns for the last two years.
Debt details: Credit reports, collection letters, and statements for secured and unsecured debts.
Asset records: Property deeds, car titles, and bank statements for the last 3–12 months.

Tip: Use your credit report to ensure you include all creditors in your filing.

Step 4: Determine Eligibility with the Means Test

The means test determines whether you qualify for Chapter 7 or need to file Chapter 13.

Chapter 7 bankruptcy: Your income must fall below Michigan’s median income level for your household size.
Chapter 13: If your income exceeds the median, you must create a court-approved repayment plan.

Median Income Levels for Michigan (2025):

1 person: $65,571
4 people: $112,332
6 people: $132,132

Step 5: File Your Bankruptcy Petition

File your bankruptcy petition and schedules with your district bankruptcy court.
Filing Fees:

Chapter 7: $338
Chapter 13: $313 (fee waivers may be available if your income is below 150% of the poverty level).

Once filed, an automatic stay immediately halts creditor actions like wage garnishments and foreclosure.

Step 6: Attend the 341 Meeting of Creditors

Approximately 20–40 days after filing, you’ll attend the 341 meeting conducted by your trustee.

What happens: The trustee reviews your case and may ask questions about your finances. Creditors may attend but rarely do.
Prepare to provide: Proof of identification, Social Security number, and required financial documents.

Step 7: Complete the Post-Filing Debtor Education Course

To receive your discharge, you must complete a debtor education course within 60 days of the 341 meeting.

Purpose: This course provides financial management tips to help you avoid future financial issues.

Step 8: Receive Your Bankruptcy Discharge

For Chapter 7, most debts are discharged within 3–6 months. Chapter 13 filers complete a repayment plan over 3–5 years before receiving a discharge.

Preparing for the Bankruptcy Process

Before diving into the bankruptcy process, it’s crucial to prepare thoroughly. Start by gathering all necessary financial documents, such as tax returns, pay stubs, and bank statements. This comprehensive collection will provide a clear picture of your financial situation.

Next, make a detailed list of all your debts, including credit card debt, medical bills, and tax debts. This step ensures that no liabilities are overlooked during the filing process. Seeking the advice of an experienced bankruptcy attorney can be invaluable at this stage. A bankruptcy attorney can guide you through the complexities of the process and help you make informed decisions.

Additionally, completing a credit counseling course is a mandatory step before filing for bankruptcy. This course will teach you how to manage your finances better and explore alternatives to bankruptcy. Be prepared to provide detailed information about your income, expenses, and assets during this course.

By taking these preparatory steps, you’ll be well-equipped to navigate the bankruptcy process smoothly and effectively.

What Common Types of Bankruptcy Are Available in Michigan?

Chapter 7 bankruptcy: Liquidation bankruptcy for individuals with limited income, discharging most unsecured debts.
Chapter 13: Allows individuals with regular income to create a repayment plan, helping retain assets like a home or car.

Bankruptcy Court and Process

The bankruptcy court is a specialized federal court that handles bankruptcy cases. The process typically begins with the filing of a bankruptcy petition, which officially starts your case. This petition includes detailed information about your financial situation, debts, and assets.

Once your petition is filed, a bankruptcy trustee will be assigned to your case. The trustee’s role is to review your petition and determine your eligibility for Chapter 7 or Chapter 13 bankruptcy. They will also oversee the administration of your case, ensuring that all procedures are followed correctly.

A crucial part of the process is the creditors’ meeting, also known as the 341 meeting. During this meeting, the trustee and any attending creditors will discuss your bankruptcy petition and ask questions about your financial affairs. This meeting is an opportunity to clarify any issues and ensure that all information is accurate.

Following the creditors’ meeting, the bankruptcy court will issue a discharge of debts if all requirements are met. This discharge is the legal proof that your eligible debts have been eliminated. It’s essential to follow the instructions of the bankruptcy trustee and the court throughout this process to ensure a successful outcome.

Initiate Your Path To Relief

Claim Your Right To Restart

Bankruptcy Protections

Bankruptcy offers several protections designed to help individuals and businesses regain financial stability. One of the most significant protections is the automatic stay, which immediately halts all collection actions by creditors, including lawsuits and foreclosures. This stay provides much-needed relief and time to reorganize your finances.

Bankruptcy also includes exemptions for certain assets, such as your primary residence and personal property. These exemptions ensure that you can retain essential items necessary for daily living. The bankruptcy trustee will work diligently to protect your rights and ensure that these exemptions are applied correctly.

Understanding your rights and protections under bankruptcy law is crucial for making informed decisions. By knowing what protections are available, you can navigate the bankruptcy process with greater confidence and security.

8 Mistakes to Avoid When Filing for Bankruptcy

Bankruptcy can provide a fresh financial start, but mistakes during the process can lead to delays or complications. Here are some common errors to avoid and tips to ensure a smooth filing:

1. Failing to Disclose All Assets

Mistake: Omitting property or income from your bankruptcy forms can lead to accusations of fraud.
Solution: Be honest and thorough when listing assets, income, and debts. Work with an attorney to double-check your documents.

2. Missing Deadlines

Mistake: Failing to submit required paperwork or attend scheduled hearings can result in case dismissal.
Solution: Keep a detailed calendar of deadlines and consult with your attorney regularly.

3. Choosing the Wrong Bankruptcy Chapter

Mistake: Filing for Chapter 7 when Chapter 13 is more appropriate (or vice versa) can result in unfavorable outcomes.
Solution: Discuss your financial situation with a bankruptcy attorney to determine the best fit.

4. Running Up Debt Before Filing

Mistake: Using credit cards excessively before filing can be seen as fraud, and those debts may not be discharged.
Solution: Avoid unnecessary spending once you’ve decided to pursue bankruptcy.

5. Transferring Assets Before Filing

Mistake: Transferring property to friends or family to avoid losing it in bankruptcy can void your case.
Solution: Consult with your attorney before making any financial moves.

6. Overlooking Non-Dischargeable Debts

Mistake: Assuming all debts will be wiped out can lead to unrealistic expectations.
Solution: Understand that some debts, like child support, taxes, and student loans, typically cannot be discharged.

7. Filing Without Professional Help

Mistake: Filing on your own (pro se) can result in errors that jeopardize your case.
Solution: While legal aid organizations and online tools are available, consulting with an experienced bankruptcy attorney is the safest approach.

8. Ignoring Post-Filing Requirements

Mistake: Failing to complete required debtor education courses can delay or cancel your discharge.
Solution: Complete all courses promptly and submit certificates to the court.

By avoiding these common pitfalls, you’ll increase your chances of a successful bankruptcy process and set yourself up for a stronger financial future.

Take the First Step Toward Financial Relief

Filing for bankruptcy in Michigan is a detailed process, but it offers a path to a brighter financial future. For personalized assistance and guidance, contact Kostopoulos Bankruptcy Law today at 877-969-7482 for a free no, obligation consultation. Let our team help you regain control of your finances and achieve the fresh start you deserve.

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Additional Resources

If you’re considering filing for bankruptcy, numerous resources are available to help you understand the process and make informed decisions. The National Foundation for Credit Counseling (NFCC) offers credit counseling and education to help you manage your finances effectively.

The American Bankruptcy Institute (ABI) provides comprehensive information and resources on bankruptcy law and the bankruptcy process. Additionally, the U.S. Department of Justice offers valuable information on bankruptcy and credit counseling.

Your local bankruptcy court may also provide additional resources and information specific to your area. Consulting a qualified bankruptcy attorney is highly recommended to ensure you fully understand the process and receive personalized advice tailored to your situation.

By utilizing these resources, you can gain a deeper understanding of bankruptcy and take the necessary steps toward financial relief.

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FAQs About Filing for Bankruptcy in Michigan

Can I file for bankruptcy without an attorney?

Yes, but hiring an attorney is highly recommended to avoid costly mistakes and ensure a smoother process.

How much does it cost to file for bankruptcy in Michigan?

Chapter 7 costs $338, and Chapter 13 costs $313. Fee waivers are available for low-income filers.

How long does the bankruptcy process take?

Chapter 7 takes 3–6 months, while Chapter 13 involves a repayment plan lasting 3–5 years.

Will I lose all my property in bankruptcy?

No. Michigan's exemptions allow you to protect essential assets, such as your home, vehicle, and personal belongings.

Can filing for bankruptcy stop foreclosure or wage garnishment?

Yes, the automatic stay halts foreclosure proceedings and garnishments immediately upon filing.