If you’re struggling with monumental debt and you feel like you’re already at the end of your rope, consulting with a bankruptcy attorney might bring you some relief. Fortunately, it’s easy to find a competent lawyer in Ann Arbor who can walk you through the process of filing for bankruptcy in Michigan.
Preparing Documents for Your Ann Arbor Bankruptcy Attorney
Before you file for bankruptcy in Michigan, you’ll need to get your documents in order. Apart from completing the requirements for filing, your Ann Arbor lawyer will need the following to determine the best way to approach your case:
- Social Security Card – Present your actual card, which will be verified before filing. If, for any reason, you don’t have this, you can also present your W2.
- Government-issued ID – Any photo identification issued by the US government. This includes your Michigan-issued state ID card or your driver’s license.
- Proof of Income – Paperwork showing your current income as well as the earnings you’ve received over the past six months. If you own a business or run a professional practice, you can show income statements rather than payslips.
- Tax Returns – Present all proof of taxes paid for the last two years. These documents will also reflect your previous income.
- Bank Statements – Ask your bank for statements of all your accounts. If possible, get records for the past six months.
- Credit Card Statements – Compile your credit card bills from the past six months. This is especially important if a large part of your debt problems are on credit cards.
- Real Estate Documents – If your Ann Arbor home is under your name, present ownership documents. Include everything that pertains to your mortgage as well as its recent appraisal value.
- Other Property Ownership – If you own any other valuable property, present the respective ownership documents. This might include cars and recreational vehicles.
- Retirement Plans – Submit the latest statements for your pension plans. That includes your 403(b) plan, 401(k) account, or annuities.
- Other Investments – If you have any other investments, include ownership documents as well as records of its value. This might include life insurance policies, bonds, and stock certificates.
Your Ann Arbor attorney might require additional documents depending on your specific case.
Deciding Between Chapter 7 and 13 Bankruptcy in Michigan
Your Ann Arbor bankruptcy attorney will advise you on the best way to approach your specific case. Although the laws are the same across the country, Michigan bankruptcy laws involve different exemptions for property liquidation as well as income limits. These details will determine whether you qualify for chapter 7 or chapter 13.
Chapter 7: Straight Bankruptcy
Chapter 7 is also called the “fresh start program” or “straight bankruptcy.” That’s because the end result is completely eliminated debt. To determine your eligibility, your Ann Arbor bankruptcy attorney will perform a means test. That involves examining your aggregate household income and current financial position. If that falls below the threshold set by the state of Michigan, you can file for Chapter 7.
You can file for this type of bankruptcy whether or not you have assets in your name. If you do have properties, those will likely be liquidated in order to pay off at least a portion of the amount you owe to your creditors. Your Ann Arbor bankruptcy attorney should help you keep any assets that might be protected by either federal or Michigan law.
Chapter 13: Wage Earner’s Plan
Chapter 13 is typically referred to as “debt renegotiation” because it is a legal procedure that allows you to renegotiate your payment terms, and possibly even the total amounts owed. Generally, you’ll be able to pay off your debt over a period of up to five years. This type of bankruptcy is also commonly called the “wage earner’s plan” because your new repayment plan will be based on what you can manage given how much you earn as regular income.
Unlike Chapter 7, this type does not require your income to fall below a certain threshold. So, it is easier to qualify for. Additionally, if your name is on the title or mortgage of your Ann Arbor home, chapter 13 gives you a better chance of keeping it or any other properties you might have.
What Does Filing for Bankruptcy in Michigan Involve?
The Michigan bankruptcy process begins as soon as your attorney files your documents with a US bankruptcy court. Since you live in Ann Arbor, that will likely be in the Detroit court location. When your papers have been filed, a trustee will be assigned to your case. A notification will also be sent to each of your creditors.
You’ll need to appear in court for a meeting with your trustee. Although this meeting is called a “Meeting of Creditors,” creditors don’t often attend. During this meeting, you’ll answer some questions about your finances. Although the meeting will last only a few minutes, your trustee and your lawyer will likely have to correspond for weeks after until a decision is made on your case.
Choosing the Ann Arbor Bankruptcy Lawyer
Finding a bankruptcy attorney in Ann Arbor is your most practical option if that’s where you live. Before you hire one, make sure they’ve had plenty of successful experiences, specifically in Michigan’s bankruptcy court. More specifically, ask them about their successes with cases similar to yours.
Remember that your lawyer’s role isn’t just to prepare and file your documents. They will be most valuable in deliberations with your trustee and fighting for your rights to keep certain properties in your possession. Without intimate knowledge of federal and Michigan bankruptcy laws, your attorney might not be able to serve you well.
Living with unmanageable debt in Ann Arbor can cause incredible anxiety, hardship, and even shame. But there are always options available to you if things seem to have become unrectifiable. The process of declaring bankruptcy in Michigan might seem intimidating, but it could actually be the best solution to your financial troubles. You just need to take the first step of finding an excellent Ann Arbor bankruptcy lawyer and ask them for help.