Those who are thinking about filing for bankruptcy in the state of Michigan might be wondering what they can expect out of the process. While bankruptcy is not a cure-all for financial problems, it is sometimes the best option. Here is some handy information about how one qualifies for and goes about filing for bankruptcy.

Some people may think that bankruptcy is a way to erase all debts, but that is simply not true. In Michigan, some debts will remain afterward, including taxes, criminal and traffic fines, back child support, most student loans and anything not specifically on the list of debts to be discharged.

Also, credit counseling is mandated by state law before filing for bankruptcy. Debtors must either contact creditors to obtain a workable payment plan or seek a debt consolidation loan within six months prior to filing. After the documents are filed, completing a financial management course is also required.

Bankruptcy comes in two different forms: chapter 7, the discharging of debt while keeping a home or property not in default, and Chapter 13, a repayment plan that typically allows the debtor to keep a home, automobile and certain other property even if loans for such properties are in default.

Michigan bankruptcy filings require extensive and often complex paperwork, including a two page petition and a list of all the debts to be discharged and property to be excluded. Deeds or titles of property owned and verification of income, expenses and financial transactions for two years prior to filing are also needed. The fee for Chapter 7 filings is $299, while Chapter 13 is $274.

Once the paperwork is filed, the harassing phone calls from creditors can be halted. In fact, creditors are required by law to cease contact once advised of the bankruptcy, but the court may not inform them for weeks. To stop the calls sooner, debtors should let their creditors know of the filing as soon as possible and supply a case number.

The proceeding itself is a short meeting (called a 341 meeting) with a bankruptcy trustee. The trustee may ask clarification questions regarding financial status and the debtor is sworn under oath to answer. The debtors’ attorney and creditors can attend the meeting.

Those considering this option will be relieved to know that bankruptcies don’t end up in court unless a debt or its discharge is disputed. Creditors have 60 days after the 341 meeting to challenge any debts included. Should there be no dispute, the process is generally finalized in three to six months.

As filing bankruptcy in Michigan is a complicated process requiring many steps, it’s generally best for people thinking about debt relief in this manner to seek further assistance from a local attorney that specializes in bankruptcies. The right attorney can be an invaluable resource, protecting your property and your interests to the full extent of the law during an often difficult time.

If you’re thinking about filing for bankruptcy in the Detroit area, contact Michigan bankruptcy attorney A Better Way Bankruptcy. With nearly three decades of collective experience, their friendly, helpful and compassionate attorneys and professionals can help you obtain relief from debts, stop calls from creditors and get the fresh start you need. Powered by SEO 2.0 Services

This entry was posted on Tuesday, March 2nd, 2010 at 2:15 am and is filed under Finance.