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Filing for bankruptcy can be a complex process, with several decisions that need to be made along the way. If you are considering filing for bankruptcy in Michigan, you'll need to satisfy a residency test, and then use U.S. census data to determine if your income is low enough to qualify for Chapter 7. You'll also need to decide which of two alternative arrangements you'll use to determine which assets are exempt from the proceedings. This page will help you learn how to file for Michigan bankruptcy.
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Can My Home be Saved If I File Chapter 13 Bankruptcy?
The excerpt from a question and answer session between a prospective bankrupt and a Michigan bankruptcy attorney addresses the concern of whether or not a house can be saved if a Chapter 13 bankruptcy is filed. The attorney assures the caller, that if he has provided accurate information, he will not lose his home during the bankruptcy process, but it will be up to him to make the payments going forward.
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Introduction
- Bankruptcy is governed by the U.S. Code, and cases are heard in federal courts. Certain aspects of the bankruptcy process, however, are individualized by the state you file in. Michigan residents need to meet income standards that are specific to Michigan, for example. Individuals in Michigan may be eligible to file for bankruptcy under Chapter 7, Chapter 11, or Chapter 13.
Step 1: What is Chapter 7 Bankruptcy?
- When you declare bankruptcy using Chapter 7, your assets will be sold off to settle your debts. Any qualified debts which can't be repaid by the proceeds generated from your assets will be forgiven. Chapter 7, or straight bankruptcy, requires you to sell off your assets to repay your debts. Some debts are generally not extinguished as part of a Chapter 7 bankruptcy, such as taxes, student loans, or debts incurred in anticipation of filing bankruptcy. There are also assets that you are not required to sell as part of the bankruptcy; these are termed exempt assets.U.S. Courts: Chapter 7 - Bankruptcy Basics
Step 2: Chapter 7 Michigan Income Test
- There are several conditions you need to meet in order to qualify for Chapter 7 bankruptcy protection. One is an income test, also called a means test, which is based on data published by the Census Bureau. In order to qualify for chapter 7, you income must be lower than the median for similarly sized families in your state. the applicable figures for Michigan filings after February 1, 2008 are:
Step 3: Chapter 7 Michigan Exemptions
- Certain assets will be exempt from liquidation under Chapter 7 bankruptcy. Michigan bankrupts can elect either the federal exemptions or the Michigan exemptions. The differences are significant, and which alternative should be selected depends on your personal circumstances. For example, the federal exemptions permit you to retain more home equity, but the Michigan exemptions exclude a portion of earned but uncollected wages. If you're unsure about which will be better for you, you may want to hire an attorney who specializes in bankruptcy law.Lawyers.com: Bankruptcy in Michigan
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