Bankruptcy / Michigan

Filing Bankruptcy in Michigan: 4 Things You Need to Know

Written by Ben Tejes
Updated May 25th, 2023

You are looking to file bankruptcy in Michigan. The most important things to understand are the process, qualification, costs, risk of losing belongings, pros and cons, and alternatives. The purpose of this article is to provide this information and personalized information based on your unique situation from our bankruptcy calculators.

Firstly, you need to know that bankruptcy is a legal debt relief option. It can help you eliminate debt, protect you from creditors, and give you a fresh start. In fact, in Michigan, there were 18,630 from for the past year ending June 30th, 2021.  Bankruptcy can even allow you to save for retirement.

You will notice that steps 1-7 below are to help you research whether and how to file for bankruptcy in Michigan. Steps 8-15 are the actual bankruptcy process.

Understand How Filing Bankruptcy in Michigan Will Affect You 

The rules and logistics of filing bankruptcy in Michigan are different than in other states. As such, it’s important to understand exemptions, qualification, and attorney costs in Michigan.

1) Understand the Differences Between Chapter 7 and Chapter 13

Chapter 7 and Chapter 13 bankruptcy are the most common consumer bankruptcy filed in the United States. You need to know the difference because one chapter is more expensive and also often takes much longer.

Chapter 7 Bankruptcy in Michigan

A Chapter 7 bankruptcy is referred to as liquidation bankruptcy. In many cases, bankruptcy filers do not lose their home or vehicle by using bankruptcy exemptions. We will cover how your belongings may be at risk below. 

Here’s what you need to know about filing Chapter 7 bankruptcy in Michigan.

  1. It’s fast. You can receive a bankruptcy discharge (debt forgiveness) in 120 days.
  2. It’s less expensive. 
  3. You can lose assets, but you may also not due to bankruptcy exemptions. See below.
  4. You have to qualify.
  5. On credit report for 10 years.

Chapter 13 Bankruptcy in Michigan

A Chapter 13 bankruptcy is known as a wage earner’s plan. In many cases, you will pay back a portion of your unsecured debts in a payment plan. 

Here’s what you need to know about filing Chapter 13 bankruptcy in Michigan.

  1. It’s slow. It can take 3 or 5 years.
  2. It’s more expensive.
  3. You often keep your assets.
  4. No qualification is needed as long as you are below the debt limits.
  5. On credit report for 7 years.

For more information, you may consider reading, “Is it better to file Chapter 7 or Chapter 13?” and “Is Chapter 13 Worth It?” You should also consider the pros and cons of bankruptcy.

2) Understand Which Debts Will Be Eliminated

The goal of bankruptcy is to get relief from your debt. As such, it can be helpful to understand the types of debt that can be eliminated when filing for bankruptcy. 

Many debts can be discharged. This includes unsecured credit cards, medical debts, personal loans, old utility bills, judgment debts, and old lease payments 

Other debts cannot be discharged. This includes back alimony or child support, debts owed to the government, judgments related to DUI accidents, tax debts, and administrative costs or restitution 

Tax debt receives special treatment in Chapter 13. You may not know how much debt you have. As such, you can access a free credit report annually, thanks to the US government. This can help you estimate how much debt would be eliminated by filing for bankruptcy.

3) Estimate Whether You Will Lose Any Property

As you can imagine, many people want to keep their home, car, cash, etc. when filing bankruptcy. 

You need to understand the bankruptcy exemptions in Michigan. The bankruptcy exemptions are complex because some states allow you to choose between state and federal exemptions when filing bankruptcy. For example, check out the Michigan homestead exemption.

As such, we created this Michigan bankruptcy exemptions calculator to simplify the information. This free calculator helps you estimate whether your belongings are at risk when filing bankruptcy in Michigan.

4) Estimate Whether You Will Qualify For Chapter 7 bankruptcy in Michigan

As stated above, you often have to qualify to file Chapter 7 bankruptcy. Qualification is based on US means testing. The means testing is based on the household income and size of the household for Michigan. 

Bankruptcy Means Test In Michigan

The bankruptcy means test in Michigan often changes every 6 months. To help, we built the following bankruptcy means test calculator to help you estimate qualification, understand the cost and compare bankruptcy alternatives.

Michigan Chapter 7 Bankruptcy Income Limits 

You can see the income limits for your household size in the table below for filings on or after May 15, 2023. Please note that you would add $9,000 for each additional household member after 9 people.

# of PeopleAnnual Income

5) Understand Alternatives to File Bankruptcy

There are many bankruptcy alternatives to consider. We will cover the two most common alternatives, but you can find more in our bankruptcy alternatives article. As a reference, filing Chapter 7 bankruptcy is often the least expensive and the shortest.

Debt Settlement

Debt settlement is also known as debt negotiation, debt relief, or a debt consolidation program (not to be confused with a loan). In debt settlement, a company or you will negotiate with your creditors for a lower amount. You can save money and avoid filing bankruptcy. You may also be exposed to lawsuits, so it’s important to understand which creditors are likely to sue. A debt settlement programs often last 2 - 5 years.

Debt Management

Debt management is also known as credit counseling. In debt management, a company will negotiate with your creditors for a lower percentage interest rate. You can save money on interest and avoid filing bankruptcy. Debt management can be more expensive than debt settlement and Chapter 13. Debt management programs often last 5 years. 

Determine Whether You Need Help to File Bankruptcy in Michigan

Did you know that some people file for bankruptcy without an attorney? Many people prefer using a bankruptcy lawyer given the complexity of filing bankruptcy, but it is possible to often file Chapter 7 bankruptcy without an attorney. Filing Chapter 13 without an attorney may be much more challenging.

6) Understand the costs of filing bankruptcy in Michigan

When you file for bankruptcy, you need to understand the cost and affordability of bankruptcy. The costs primarily consist of the filing fee (a fixed cost) and the attorney fee (a variable cost if you decide to hire an attorney). Firstly, most attorneys offer payment plans. Some also offer $0 down payment options. The cost of the attorney can be variable based on such factors like your location (Example: Detroit vs. Grand Rapids) and the difficulty of the case.

In Michigan, a Chapter 7 bankruptcy attorney can cost an estimated $1000 - $1500 and a Chapter 13 bankruptcy attorney can cost an estimated $3,000.

We built this Michigan attorney fee calculator to help you estimate costs based on your specific zip code. 

If you cannot afford a payment plan, you may also look at the legal aid options in your state and also how the filing fee waiver works.

Legal Aid In Michigan

There are certain situations where you could get help through legal aid. Please note that each legal aid may have criteria set for who they will help. Here are legal aid option(s) in Michigan.

Filing Fee Waiver in Michigan

There’s a filing fee to file bankruptcy. You can check the Michigan filing fee waiver requirements to see whether you may be eligible for the filing fee waiver. 

7) Determine whether to hire an attorney to file bankruptcy

Once you understand the cost, you can now determine whether to hire an attorney to file bankruptcy. Most attorneys will send you a retainer agreement that will outline the terms of the engagement. You will most likely need to submit information like pay stubs and tax returns for them to file the bankruptcy petition.

You may want to be aware of these 5 things when hiring a bankruptcy attorney. Also, you should consider whether you need to hire a bankruptcy lawyer by reviewing the pros and cons of hiring an attor.ey

How To File Bankruptcy in Michigan

You are ready to actually file bankruptcy in Michigan once you understand your options and have decided whether to file bankruptcy with an attorney

8) Take Credit Counseling Course

You have to take two mandatory credit counseling courses to complete your Chapter 7 bankruptcy. The Chapter 7 trustee may request the certificate of completion in the meeting of creditors. The first course is a pre-bankruptcy course, and the second is the pre-discharge course. 

If you are filing with an attorney, your attorney may have suggestions for both the credit counseling and debt education course. If not, you can see the list of approved credit counseling courses in Michigan.

9) File Bankruptcy Petition and Other Forms

To file bankruptcy, your attorney or you must file a variety of bankruptcy forms. For example, you may be required to provide the financial affairs and schedules below:

  • List of all the creditors and the amounts of those claims
  • Your source of income including frequency and amount
  • All of the property you own
  • A comprehensive list of your living expenses 

There are also local rules and forms that may be specific to Michigan. If you are filing bankruptcy with an attorney, they should help guide you through the local requirements. For example, see the local rules in Michigan based on the district:

10) A Michigan Trustee is Assigned To Your Bankruptcy Filing

A bankruptcy trustee is assigned to your bankruptcy case to review the paperwork and look for non-exempt belongings that you may own. You have to submit such forms as a recent tax return to the trustee. If you have non-exempt belongings, the trustee may manage the sale and liquidation of those belongings.

See the Chapter 7 and Chapter 13 trustees in Michigan for bankruptcy district, name and contact information. As a Chapter 13 bankruptcy is much longer, you may have more interaction with the Chapter 13 trustee or someone from his/her office.

11) Attend the Meeting Of Creditors

The 341 meeting of creditors and the hearing where all debtors must attend in a bankruptcy proceeding. The meeting often occurs between 21 and 50 days after filing the petition. It generally takes 10 to 15 minutes. The meeting is a recorded conversation between the trustee, your bankruptcy attorney, and yourself about the paperwork you filed. The bankruptcy trustee will ask questions to ensure that you understand the bankruptcy process.

Do Creditors Show Up?

Creditors are notified that they may ask the debtor questions. That said, in all of the 341 meetings I have attended, I have not seen a creditor show up.

Understand Michigan Court Locations

Many 341 meetings of creditors have been over the phone or over Zoom due to the pandemic. That said, you may want to see where the courthouse is in Michigan if there are any meetings that need to take place in person. Below are the court locations for filing bankruptcy based on the bankruptcy district.

Eastern District

  • Theodore Levin U.S. Courthouse

    231 W. Lafayette Blvd.

    Detroit, MI 48226
  • Federal Building

    200 E. Liberty Street

    Ann Arbor, MI 48104
  • United States Post Office Building

    1000 Washington Ave.

    Bay City, MI 48708
  • Federal Building and U.S Courthouse

    600 Church Street

    Flint, MI 48502
  • Federal Building and United States Courthouse

    526 Water Street

    Port Huron, MI 48060


  • 399 Federal Bldg
    110 Michigan St NW
    Grand Rapids MI 49503
  • 113 Federal Bldg
    315 W Allegan St
    Lansing MI 48933
  • 107 Federal Bldg
    410 W Michigan Ave
    Kalamazoo MI 49007
  • 330 Federal Bldg
    202 W Washington St
    PO Box 698
    Marquette MI 49855

12) Confirmation of Bankruptcy Filing Qualification

After the meeting of creditors, the bankruptcy trustee will have enough information to decide whether you will qualify for Chapter 7 bankruptcy. The trustee will look for nonexempt assets and will decide whether it’s worth it to liquidate nonexempt assets. The trustee may do this by understanding the retail value of the asset and whether it will sell. 

The secured debts such as a vehicle will need to be dealt with around this point in the process. You can often reaffirm the debt as an asset, which is very common for vehicles.

13) Take second mandatory debt education course

You must take a second mandatory debt education course in Michigan before filing for discharge. Once you receive the certificate of completion, your attorney or you would add that into your filing to show proof of completion.

See the list of approved debtor education courses in Michigan. Once filed, you now just have to wait for discharge.

Receive Your Discharge After Filing Bankruptcy

You often receive your bankruptcy discharge around 120 days after filing in Michigan. This can be variable based on different factors.

14) Receive Your Bankruptcy Discharge

You may receive the bankruptcy discharge form letter after you have officially been discharged. The form states that creditors cannot pursue discharged debts, that most debts are discharged, and that some debts are not discharged. Here’s how the form looks:

Congratulations, receiving your bankruptcy discharge is a major step to restarting your financial freedom.

15) Rebuild your Credit After Filing Bankruptcy

Unfortunately, Chapter 7 bankruptcy can negatively impact your credit and Chapter 13 can negatively impact your credit. That said, you have an opportunity to rebuild your credit shortly after bankruptcy. To assist, you can use our free credit rebuilding portal designed to help you increase your credit score by 100 points in less than 6 months. 

City Bankruptcy Guides in Michigan

Do you live in a city in Michigan and want specific information on filing bankruptcy in your city? Do you want to know how to find a reputable attorney in or near your city? You are not alone. As such, we created the following city guides in Michigan to keep you informed about filing bankruptcy in your city.


Filing bankruptcy in Michigan can be a difficult decision for many people. Hopefully, the content in this article can help you understand how to file bankruptcy, understand the costs and pros and cons, and alternatives. Take the bankruptcy means test calculator or reach out to if you have any questions.