Filing for personal bankruptcy in the state of Michigan is a very similar to other states in terms of both process and legal requirements. The process involves individuals consulting with an attorney, filling out the required paperwork, filing the petition, and appearing before the court. Personal bankruptcies are generally filed either under Chapter 7 for complete liquidation, or Chapter 13 for reorganization. Individuals with extenuating circumstances may be able to file under Chapter 11, but this is not normal.
All bankruptcies in the state of Michigan are filed in one of the state's two district courts. In each district there are several clerks which enable you to choose the one closest to your location. However, understand that you will need to file in the district where you live, or the one where you conduct most of your personal business - whichever is applicable to your circumstances. A bankruptcy attorney is the best person to advise you about which district to file in.
Non-Dischargeable Debts in Michigan
Since personal bankruptcy is governed in a general sense by federal law, the basic rules and regulations are the same across all of the states. Where states do differ generally lies in dischargeable and non-dischargeable debts and exempted assets. In terms of dischargeable and non-dischargeable debts, it's important to realize that bankruptcy does not entirely wipe out all indebtedness. There are still some things that you will be required to pay regardless of the chapter under which you filed a petition.
In Michigan there are some standard non-dischargeable debts that are the same in every state. Examples of these debts are back child support and alimony payments, federal and state tax liens, student loans, and civil fines and penalties. Examples of non-dischargeable debts unique to Michigan include judgments against you for injuries or deaths resulting from DWI/DUI, and outstanding debts you failed to list on your petition.
In the state of Michigan a federal bankruptcy court can classify other debts as non-dischargeable based on certain circumstances. Examples of those debts include those incurred by fraudulent activity, payments for luxury items up to $1,500 that were incurred within 60 days of filing, loans or cash advances of up to $1,500 granted within 60 days of filing, payments required of you for malicious harm or injury to another person or his property, and any settlements granted by a divorce proceeding.
Michigan Exemptions
The other area in which Michigan law differs from other states is that of exemptions. Exemptions are those assets which cannot be seized and liquidated in order to satisfy creditors. Standard exemptions under federal law include your primary residence, a personal vehicle used to go to and from work, and jointly owned personal or business property. In some circumstances, if the equity in your home or personal/business property is not protected, you may be required to satisfy the difference in order for those properties to be considered exempt.
The state of Michigan does allow for some exemptions that differ from other states. Some examples include personal property with a total value of up to $1,000, some life insurance and disability insurance payments, and pensions for certain types of public employees. One of the more unique exemptions in Michigan includes various types of livestock, barnyard animals, hay, and grain estimated to last up to six months. Under some circumstances you may be able to exempt six months worth of food and fuel as well.
There are a long list of other exemptions Michigan residents qualify for that are too numerous to list here. For this reason, bankruptcy courts generally suggest that debtors hire a bankruptcy attorney to guide them through the process. While it is entirely legal to represent yourself in federal bankruptcy court, the laws can be confusing and somewhat convoluted at times. If you fail to file your petition exactly as required by law that is sufficient cause for a court to dismiss your case before it's heard. Therefore, it's extremely important that your paperwork be filed correctly.
As stated earlier, there are two district courts in the state of Michigan, each with several clerks. You may contact the clerk in your area to request paperwork, get the address where the petition needs to be filed, and receive further instructions. When you file your petition you will need to include the federal forms, the list of attachments, certificates of consumer credit counseling services, and payment to cover all related court costs. You may also have to pay your attorney up front if you choose to use one.