Filing Chapter 7 Bankruptcy in Michigan

Chapter 7 bankruptcy or “straight bankruptcy” is a process designed to help consumers start over financially. Chapter 7 discharges unsecured debts such as high-interest credit cards and medical bills. Although the process is organized under federal law, Chapter 7 cases vary by jurisdiction. Each state, as well as the federal government, has enacted exemption laws that dictate the amount of property a debtor can keep through the bankruptcy process. In most cases, exemption laws protect all of the assets of the debtor — allowing them to file for bankruptcy and keep all of their property.

In addition to unique exemption laws, each state has different income guidelines for determining whether the debtor is eligible to file for Chapter 7. Thanks to bankruptcy reform in 2005, debtors seeking to file Chapter 7 bankruptcy must demonstrate that they do not have enough disposable income to pay something back to their creditors. If your income over the last 6 months is below the median in your state, you will automatically be eligible to file Chapter 7. If, on the other hand, your income is greater than the state median over the last 6 months for a household of your size, you will need to subject your monthly expenses to the means test.

The means test is a formula that calculates disposable income. If you have too much spoils left over at the end of the month, there is a presumption that you should be filing for Chapter 13 instead of Chapter 7 bankruptcy.

Cost to file chapter 7 in Michigan

The chapter 7 filing fees in Michigan are $338, but that doesn’t tell the whole story of the real cost to file bankruptcy. Bankruptcy lawyers usually charge between $1,000 and $2,000 to file a chapter 7 case, in addition to the filing fee.

Michigan Bankruptcy Court Locations

Michigan bankruptcy courts are divided into two districts: the Eastern District and the Western District. The Eastern District of Michigan Bankruptcy Court is further divided into divisions: Bay City, Detroit, and Flint all have a bankruptcy court to serve local debtors. Similarly, on the west side of the state, Grand Rapids and Marquette both house bankruptcy courts.

The city that you live in will determine the location of your meeting of creditors as well as the bankruptcy court that will hear any issues that may arise in your case.

Eastern District

Bay City: 111 First St., Bay City MI 48708, (989) 894-8840

Detroit: 211 W. Fort St., Detroit MI 48226, (313) 234-0065

Flint: 226 W. Second St., Flint MI 48502, (810) 235-4126

Western District

Grand Rapids: 1 Division Ave. N, Room 200, Grand Rapids MI 49503, (616) 456-2693

Marquette: 202 W. Washington St., Third Floor, Marquette MI 49855, (906) 226-2117

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