Michigan’s Rules for Filing Bankruptcy After Relocation

Filing for bankruptcy can be a complex process, and navigating the rules in a new state can add to the confusion. If you’ve moved to Michigan and are considering bankruptcy, it's essential to understand the state's specific regulations and procedures.

When relocating to Michigan, the first step is to determine your residency status. Generally, to file for bankruptcy in Michigan, you must be a resident of the state for at least 91 days prior to your filing date. This is important because it influences which exemptions you can utilize and the laws that will apply to your bankruptcy case.

Michigan allows filers to choose between federal bankruptcy exemptions and state bankruptcy exemptions. If you have lived in Michigan for less than 730 days, you must use the federal exemptions. If you have been a resident for more than 730 days, you can choose between state and federal options, whichever is more beneficial to your situation.

In Michigan, the two primary types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 is often referred to as “liquidation bankruptcy,” where unsecured debts may be discharged, while Chapter 13 involves a repayment plan to manage your debts over three to five years without losing your assets.

Before filing, it's crucial to complete a credit counseling course within 180 days preceding the filing. This requirement applies to all bankruptcy filers and can often be completed online for convenience. After this step, you can prepare the necessary paperwork, which includes a detailed account of your assets, liabilities, income, and expenses.

Once your paperwork is complete, you will file it with the U.S. Bankruptcy Court for the district where you reside. For most individuals in Michigan, this will be the Eastern District of Michigan or the Western District of Michigan, depending on your location. Make sure to pay the filing fees or request a fee waiver if you qualify based on your income.

After filing, your debts are typically put on hold, preventing creditors from pursuing collections while your case is processed. This is known as the "automatic stay," which provides immediate relief from creditors and allows you time to work through your bankruptcy plan.

Keep in mind that the bankruptcy process may include a meeting of creditors, known as the 341 meeting, where you will be asked to provide information about your debts and financial situation. This meeting is usually held about a month after your filing.

Ultimately, whether you are filing for Chapter 7 or Chapter 13, understanding Michigan’s specific rules and requirements is critical for a successful outcome. Consulting with a qualified bankruptcy attorney who is familiar with Michigan laws can provide tailored guidance and ensure that your filing is handled efficiently.

Remember, bankruptcy can be a fresh start, but being well-informed about the procedures and laws in your new state is essential for successful financial recovery.