Originals of bank books and check registers. Bank account statements, brokerage account statement and credit card statements. Copies of leases, mortgages, deeds and land contract for property owned within the last six years.
Your Chapter 7 bankruptcy trustee will likely check your bank accounts at least once during the process of overseeing your filing. They have a right to perform a full audit of your accounts or check them any time it is necessary.
Most of your retirement accounts and pension benefits will be exempt in Michigan. Traditional, simple, and Roth IRAs are exempt up to $1.28 million and educational IRAs are exempt up to $6,425. Amounts that were contributed to your IRAs or profit-sharing plans within 120 days of filing for bankruptcy are not exempt.Apr 19, 2021
They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any ...
Do they freeze your bank account when you file Chapter 7? Generally, no. Especially if the full amount in the account is protected by an exemption. Some banks (most notably, Wells Fargo) have an internal policy of freezing bank accounts with a balance over a certain amount once they learn about a bankruptcy filing.Mar 21, 2022
8 Kinds of Debt You Can't Lose in BankruptcyMost back taxes and customs. ... Child support and alimony. ... Student loans. ... Home mortgage and other property liens. ... Debts from fraud, embezzlement, larceny, or from “willful and reckless acts” ... Your car loan, if you want to keep your car. ... Debt that doesn't belong to you.More items...
Exempt property (items that a debtor may usually keep) can include:Motor vehicles, up to a certain value.Reasonably necessary clothing.Reasonably necessary household goods and furnishings.Household appliances.Jewelry, up to a certain value.Pensions.A portion of equity in the debtor's home.More items...•Apr 7, 2021
Seizing Your Real PropertyTop A creditor must take personal property to pay your debt first. If the money from your personal property does not cover your debt, the creditor can then seize and sell real property you own. Proceeds from the sale are used to pay taxes and mortgages first.
In Michigan, debt settlement, or debt negotiation, allows you to pay a reduced balance that will be regarded as payment in full. Debt settlement is often good way to get debt relief if you have one or two debts with high balances that you can't afford.
Generally speaking, in a Chapter 7 proceeding, the following types of debts are not discharged:Debts that were not listed at the start of the case (or debts for unlisted creditors). ... Most student loans (unless repayment would cause the debtor and their dependents undue hardship)Recent federal, state, and local taxes.More items...•Apr 7, 2021
Generally, the types of assets that you can keep in a bankruptcy include:personal items and clothing.household furniture, food and equipment in your permanent home.tools necessary to your work.a motor vehicle with a value up to a certain limit, usually an older vehicle qualifies.certain farm property.
Once you file for bankruptcy, an automatic stay goes into effect. An automatic stay specifically states that creditors cannot contact you to collect debts after you've filed for bankruptcy. It protects you from harassing phone calls, emails, and letters.Feb 20, 2020
The bankruptcy process falls under federal law, not Michigan state law, and it works by unwinding the contracts between you and your creditors —that's what gives you a fresh start.
Exempt your property carefully. The bankruptcy trustee —the court-appointed official assigned to manage your case—will review the exemptions. A trustee who disagrees with your exemptions will likely try to resolve the issue informally. If unsuccessful, the trustee will file an objection with the bankruptcy court, and the judge will decide whether you can keep the property.
Your creditors will stop bothering you soon after you file. It takes a few days because the court mails your creditors notice of the "automatic stay" order that prevents most creditors from continuing to ask you to pay them. Here's what will happen next:
For instance, not only do you keep all of your property, but you can save your home from foreclosure or your car from repossession. If you need time to repay a debt you can't discharge in bankruptcy, you can use this chapter to force a creditor into a payment plan.
Nondischargeable debts, like domestic support arrearages and recent tax debt, won't go away in bankruptcy, and student loans aren't easy to wipe out (you'd have to win a separate lawsuit). You'll want to be sure that bankruptcy will discharge (get rid of) enough bills to make it worth your while.
You won't lose everything in bankruptcy. You'll use your state bankruptcy exemption laws to protect your property. We list the significant exemptions below, but first, understanding the following will help you maximize what you'll keep in your case.
Exempt and nonexempt property. You can keep property protected by an exemption or "exempt" property. When a bankruptcy exemption doesn't cover the property, you'll either lose it in Chapter 7 or have to pay for it in the Chapter 13 repayment plan. Choosing state or federal exemptions.
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Additionally, if you are over 65 years of age or disabled you can increase the Michigan state homestead exemption to $57,350. If you are filing bankruptcy in Michigan and you have a lot of equity in your home you should absolutely consider using the Michigan state exemptions rather than the federal exemptions.
The Western District of Michigan is divided into five divisions: Grand Rapids, Marquette, Kalamazoo, Lansing and Traverse City. Here, again, you can contact the court clerk to determine which division you will need to file in. The Western District also requires specific local forms in addition to the federal forms, including a separate Schedule C for a joint case, the Mailing Matrix, and an Asset Protection Report.
Filing a Chapter 7 in Michigan allows you to choose between taking the federal exemptions and the Michigan exemptions. There are a couple big differences between the federal exemptions and the Michigan exemptions. First, if you are filing as a married couple filing jointly you can double some (but not all) of the Michigan bankruptcy exemptions. This does not apply to the homestead exemption, which is the second biggest difference between state and federal exemptions - the homestead exemption in Michigan (equity up to $38,225) is significantly higher than the federal homestead exemption (equity up to $25,150.) Additionally, if you are over 65 years of age or disabled you can increase the Michigan state homestead exemption to $57,350. If you are filing bankruptcy in Michigan and you have a lot of equity in your home you should absolutely consider using the Michigan state exemptions rather than the federal exemptions. There are always trade-offs to consider, however, as the federal exemptions are more favorable for your household goods and also offers a “wildcard” exemption that you can apply to something not otherwise protected by other exemptions. Below, we will compare some of the most popular in each set. Remember that you can choose either set but you cannot mix and match between them.
Filing for a Chapter 7 bankruptcy in Michigan requires a mix of both federal and local forms. The federal forms make up the bulk of the paperwork which will be the same throughout the country. The local Michigan bankruptcy forms, however, are also necessary, so make certain that you are completing everything listed in the earlier checklist. Local forms may also vary by district. Michigan has two bankruptcy districts - the Eastern District of Michigan and the Western District of Michigan.
In a Chapter 13 case, consumers representing themselves only succeeded in 2.3% of cases. By contrast, 96.2% of lawyer-represented Chapter 7 and 41.5% of Chapter 13 cases were discharged successfully. These statistics show that while you can start a bankruptcy in Michigan without a lawyer, you may not finish it alone.
Chapter 13 bankruptcy is a good option for individuals and families with homes or other property they don’t want to lose and a predictable source of income. However, the process of requesting and completing a Chapter 13 bankruptcy payment plan is even more complicated than a Chapter 7. You should be prepared to create and live by a strict budget that sends nearly all your income to creditors for 3 to 5 years. While the plan is in place you will need to file ongoing reports with the trustee and attend several status hearings at the court. Your Chapter 13 bankruptcy won’t be discharged until the payment plan is successfully completed.
Chapter 7 bankruptcy is often the best option for individuals and families who don’t have many assets, especially renters who don’t own a home. Just like any other court, you are allowed to represent yourself in a bankruptcy case. There are many resources to show you how to file bankruptcy yourself in Michigan and across the country. The federal court system has even made the forms available for free on its website.
Your financial records are some of the first documents you should collect. These records will help determine which type of bankruptcy is best suited for you. For example, if your financial documents show you have a regular income, your best fit may be Chapter 13 bankruptcy. This may have significant implications because Chapter 13 will allow you to keep possession of your property and pay your debts over time. Financial records include: 1 Most recent bank statements 2 Most recent bills from every creditor 3 Most recent payment coupons for vehicles (leased or purchased), real estate, and student loans 4 Bills or invoices for purchases in the last year 5 Receipts
A proper, thorough organization of your assets is extremely important to show you have a set income level. This income determination can be essential in proving you can repay your debts over a period of time or in proving a lack of income. Canceled checks for any expense you cannot otherwise document.
Financial Records. Your financial records are some of the first documents you should collect. These records will help determine which type of bankruptcy is best suited for you. For example, if your financial documents show you have a regular income, your best fit may be Chapter 13 bankruptcy.
It could also have a major impact on your daily life. Filing for bankruptcy can affect your credit and property.
Any legal history or pending litigation involving you is information you'll want to disclose to your attorney. Previous judgments against you show debts that will factor into determining which bankruptcy is right according to your financial situation. In addition, any pending litigation or current court order will determine how much you can afford to pay your creditors at this time.
But don’t worry, you can still keep your house before, during, and after you file for Chapter 7 bankruptcy as long as you stay current on your mortgage payments. In Michigan, you can protect your home from creditors, so be sure to declare this when you fill out these files for bankruptcy. Chapter 7 bankruptcy enables you to continue paying your mortgage instead of using that money to pay off other debts, including debt on credit cards
Bankruptcy really helps give you a “fresh-start” by wiping out many kinds of debt. But it does not wipe out priority debt. Priority debt refers to debts that get paid first as soon as money is available to creditors. Priority debts do not get wiped out when you file for bankruptcy.
The average Chapter 7 bankruptcy petition is approximately 50 pages in length, so it shouldn't come as a surprise that you'll need a lot of information to complete the required forms. Being organized will help you complete the bankruptcy forms efficiently.
The court will want verification that the information provided in your petition is accurate and that you attended the required post-filing educational course. Here's a list of what you'll need:
You also must provide the trustee with any documentation reasonably necessary to investigate your filing. For instance, your trustee might want the following items: