Michigan Bankruptcy Law
Within the state of Michigan, bankruptcy law and procedures for filing MI bankruptcy are quite similar to other states. A person or corporation will often decide to file bankruptcy if their debt is overwhelming or they simply need strict restructuring procedures. Whatever the case, it’s imperative that you hire a lawyer when thinking about filing for Michigan bankruptcy. You lawyer will be able to help you choose the best option and chapter, help you keep valuable assets, and help establish a settlement agreement with the creditors.
Michigan Bankruptcy : Corporate
In the state of Michigan, most corporations and businesses need to file under Chapter 11 bankruptcy. This type of measures often allows a corporation to reorganize their debt, and the business usually isn’t forced to give assets to a creditor. A corporation can either willingly file, or they may involuntarily file for MI bankruptcy if they are brought to court by creditors.
Michigan Bankruptcy : Personal
In the state of Michigan, most individuals and/or homeowners will file under Chapter 7 or Chapter 13 bankruptcy. These two types of actions provide different measures in paying creditors, and it’s always smart to talk with a lawyer about what option works best for you. If you are thinking of filing for MI bankruptcy, you should hire a lawyer before you even officially file and turn in the proper documents.
MI Bankruptcy Chapter 7
This type of bankruptcy is often known as straight or liquidation. In simple terms, you will start with a clean slate, but some debts within the state of Michigan can’t be filed under Chapter 7. These types of debts include student loans, taxes, child support, fines, debts accrued from the purchase of luxury items, and other debts as well.
If you provide collateral in a Chapter 7 bankruptcy, your creditor may still be able to collect some valuable assets. Most of these assets will be put up for sale in what is often termed, a “bankruptcy sale.” You house and car are almost always completely dischargeable.
MI Bankruptcy Chapter 11
This type of bankruptcy is often used to reorganize a business or corporation. The valuable assets of the company members are at not risk in a Chapter 11 case. However, the company stock is at risk when a Chapter 11 case is filed. In the state of Michigan and under Section 1107 of the bankruptcy code, a debtor is in charge of all duties besides the investigative duties. These duties may include the following:
• Accounting for property
• Examining and objecting to claims
• Filing informational reports
MI Bankruptcy Chapter 13
This type of bankruptcy is often known as wage earner or repayment bankruptcy. In this type of case, you are often forced to group all of your debt together and pay creditors over the next three to five years. The advantage in filing Chapter 13 is the fact that your property won’t be liquidated if you stick to the repayment plan. You cannot file Chapter 13 in the state of Michigan if you have secured debt over $750,000 and unsecured debt over $250,000.
In the state of Michigan, you may or may not be entitled to keep your tax returns if filing for bankruptcy. If you file under Chapter 7, the tax returns are often handled as part of the estate and may be turned over to a trustee. If you are filing for Chapter 13, you are usually entitled to keep your tax returns. As mentioned above, you cannot file for Chapter 7 bankruptcy in order to clear away tax debt to the IRS.
Filing for Michigan Bankruptcy
In order to file Michigan bankruptcy, you are required to submit a number of forms, documents, and fees. Fees are different for both Chapter 7 and Chapter 13, but they both require fees of filing fees and administrative fees. After all of the required information is submitted, you are often required to meet with a creditor and file for either Chapter 7 or Chapter 13. It’s always a good idea to hire a lawyer.