How Much Does Chapter 13 Bankruptcy Cost in Michigan?

Because you’re already facing financial challenges when considering bankruptcy, it’s understandable that you’ll have concerns about expenses. Many filers ask the question: How much does Chapter 13 bankruptcy cost in Michigan?

Filing for Chapter 13 bankruptcy in Michigan costs $313 in court fees. Additional expenses include credit counseling fees, typically $20-$50, and attorney fees, which average between $3,000 and $4,500. These costs vary based on case complexity and attorney experience.

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FAQs About Chapter 13 Bankruptcy Costs in Michigan

How much does it cost to file for Chapter 13 bankruptcy in Michigan?
Filing for Chapter 13 bankruptcy in Michigan involves a court filing fee of $313. This fee is required at the time of filing the bankruptcy petition. In some cases, the court may allow the fee to be paid in installments. Additionally, there are costs for mandatory credit counseling and attorney fees, which can vary based on the complexity of the case and the attorney's experience. It's important to budget for these expenses when considering Chapter 13 bankruptcy.
How much debt is needed to file Chapter 13?
There is no minimum debt requirement to file for Chapter 13 bankruptcy in Michigan. However, there are maximum debt limits. As of 2023, unsecured debts must be less than $465,275, and secured debts must be less than $1,395,875. These limits are adjusted periodically. Chapter 13 is designed for individuals with a regular income who can afford to make monthly payments, so the decision to file should be based on the ability to adhere to a repayment plan rather than a specific debt amount.
How long does it take for Chapter 13 to be approved?
The approval process for Chapter 13 bankruptcy in Michigan typically takes between 30 to 60 days after filing. This period includes the time needed for the court to review the proposed repayment plan and for creditors to raise any objections. Once the plan is confirmed by the court, the debtor begins making payments according to the plan's terms. The entire Chapter 13 process, from filing to discharge, usually spans three to five years, depending on the repayment plan's duration.
What is the downside to filing Chapter 13?
One downside to filing Chapter 13 bankruptcy in Michigan is the impact on your credit report, as it remains for seven years. Additionally, the repayment plan requires a long-term commitment, typically lasting three to five years, during which the debtor must adhere to strict budgetary constraints. Failure to make payments can result in the dismissal of the case. Furthermore, while Chapter 13 allows for debt reorganization, it does not eliminate all debts, such as certain taxes and student loans, which must still be paid.

How to Qualify for Chapter 13 Hardship Discharge in Michigan

To qualify for a Chapter 13 hardship discharge in Michigan, you must demonstrate circumstances beyond your control that prevent you from completing the repayment plan, show that unsecured creditors have received payments equivalent to what they would have under Chapter 7, and prove that modifying your repayment plan is not practical.

At Kostopoulos Bankruptcy Law, we understand how overwhelming financial challenges can be. With decades of experience helping Michigan residents secure debt relief, we’ll guide you through the requirements and process for obtaining a hardship discharge in Chapter 13 bankruptcy. Let’s explore who qualifies, how to apply, and the benefits of this vital bankruptcy tool.

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FAQs About Chapter 13 Hardship Discharge in Michigan

What Happens if My Hardship Discharge Is Approved?
Your qualifying debts are discharged, and you are no longer obligated to complete your repayment plan.
Does a Hardship Discharge Affect My Credit?
Yes, like any bankruptcy discharge, it will impact your credit report, but it also marks the resolution of your case.
Can I File for Chapter 7 After a Hardship Discharge?
Yes, but you must wait the required timeframe before filing for another bankruptcy case.
What If I Anticipate Future Income Changes?
If your income improves, the court may modify your repayment plan instead of granting a discharge.
What Is the Difference Between a Hardship Discharge and Conversion to Chapter 7?
A hardship discharge ends your Chapter 13 case without further payments, while a conversion to Chapter 7 involves liquidating non-exempt assets to pay creditors.

Key Differences:





Eligibility: A hardship discharge requires proof of uncontrollable hardship, while Chapter 7 requires passing the means test.



Process: Conversion to Chapter 7 may involve a new trustee and additional court filings.



Debt Relief: Both options discharge unsecured debts but have different asset implications.
Can You Reopen a Closed Bankruptcy Case to Request a Hardship Discharge?
Yes, you can reopen a closed Chapter 13 bankruptcy case to request a hardship discharge by filing a motion to reopen with the court.

Steps to Reopen:

File a motion explaining why reopening the case is necessary.
Provide supporting evidence, such as proof of hardship.
Attend a court hearing to present your case to the judge.

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