Bankruptcy is often considered to be the ultimate form of debt relief, but it is not a cure-all and it can be quite complicated. Those who are considering this debt relief option in Michigan likely are wondering whether or not they qualify, and what they should expect in regards to the process.

Some people may think that bankruptcy is a way to erase all debts, but that is simply not true. In Michigan, some debts will remain afterward, including taxes, criminal and traffic fines, back child support, most student loans and anything not specifically on the list of debts to be discharged.

In Michigan, those seeking bankruptcy must also complete a state-mandated credit counseling course within six months prior to the filing. This course requires debtors to contact their creditors to obtain a workable payment plan or seek a debt consolidation loan. After the documents are filed, taking a financial management course is also necessary.

There are two different types of bankruptcy – chapter 7, the discharging of debt while keeping a home or property not in default, and Chapter 13, a repayment plan that usually allows the debtor to keep a home, automobile and certain other property even though the loans for such properties are in default.

Michigan bankruptcy paperwork can be quite complicated. It includes a two page petition and a list of all the debts to be discharged and property to be excluded. Deeds or titles of property owned and verification of income, expenses and financial transactions for two years prior to filing are also required. Filing for Chapter 7 is $299, while Chapter 13 is $274.

Once the paperwork is filed, the harassing phone calls from creditors can be halted. In fact, creditors are required by law to cease contact once advised of the bankruptcy, but the court may not inform them for weeks. To stop the calls sooner, debtors should let their creditors know of the filing as soon as possible and supply a case number.

The proceeding itself is a short meeting (called a 341 meeting) with a bankruptcy trustee. The trustee may ask clarification questions regarding financial status and the debtor is sworn under oath to answer. The debtors’ attorney and creditors can attend the meeting.

Those considering this option will be relieved to know that bankruptcies don’t end up in court unless a debt or its discharge is disputed. Creditors have 60 days after the 341 meeting to challenge any debts included. Should there be no dispute, the process is generally finalized in three to six months.

As filing bankruptcy in Michigan is a complicated process requiring many steps, it’s generally best for people thinking about debt relief in this manner to seek further assistance from a local attorney that specializes in bankruptcies. The right attorney can be an invaluable resource, protecting your property and your interests to the full extent of the law during an often difficult time.

If you are considering bankruptcy in the Detroit, Michigan area, Michigan bankruptcy attorney A Better Way Bankruptcy. Helpful, compassionate attorneys and professionals can help you with debt relief, stop those calls from creditors and get you moving towards a fresh start. This article powered by SEO 2.0 Services

This entry was posted on Tuesday, March 2nd, 2010 at 2:11 am and is filed under Finance.