Michigan residents who find themselves suffering under tremendous debt may be able to turn to bankruptcy for a way out of their financial pressures. Filing for bankruptcy carries serious consequences, particularly for your credit rating, but these consequences are not permanent. If you are at the point of being unable to pay your bills, consider bankruptcy as a way to get back on your feet financially.
Qualifications
If you live in Michigan and have debt, you are qualified by law to file bankruptcy in the state. The process is governed by the U.S. court system through Michigan's bankruptcy courts. There are no income or debt qualifications in place that determine who can and cannot file for bankruptcy. Anyone who has debt he cannot handle is qualified to file. The courts do retain the right to deny the bankruptcy case if they feel the individual has enough assets or financial resources to handle the debts.
Does Bankruptcy Make Sense?
Rather than asking whether you qualify for bankruptcy, you must instead ask whether it makes sense to file bankruptcy. You can file if you have even just a few hundred dollars of debt, but the courts will likely deny your case. Also, you will pay filing fees, which are $299 for Chapter 7 and $274 for Chapter 13. You may also need to pay attorney's fees if you choose to use an attorney. While the law allows those with minimal debt to file, it does not make financial sense to do so unless you have several thousands of dollars in debt.
The Means Test
While you do not have to have a certain amount of debt or income to file for bankruptcy in Michigan, you do have to pass the means test to file Chapter 7, which is the form of bankruptcy that liquidates your debts. The means test compares your income to other households of your size in Michigan. If you make at or below the median level, you are qualified to file Chapter 7. As of 2010, the median income for a family of four in Michigan was $76,312. If you are above this limit, you can file Chapter 13, which is a debt restructuring plan.
How to File
If you decide to file for bankruptcy, download the forms from one of the state's bankruptcy court websites. Complete and sign them, then submit them to the courts with the filing fee. Consider hiring a bankruptcy attorney to ensure that the process is handled correctly and all of your forms are turned in on time. For both Chapter 7 and Chapter 13, you have 14 days after filing your voluntary petition to complete all forms and paperwork for the bankruptcy. If you fail to do so, the courts can dismiss your case.
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