If you’re struggling with debt and considering bankruptcy, Chapter 13 might be a solution to help you keep your property while paying back what you owe over time. This article explains the basic rules for Chapter 13 bankruptcy in Michigan and provides a checklist to help you get started.
What is Chapter 7 Bankruptcy?
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Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” allows individuals to eliminate most unsecured debts.
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The bankruptcy trustee may sell some of your property to pay back creditors, but you can keep exempt property under state law.
Requirements to File for Chapter 7 Bankruptcy in Michigan:
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Credit Counseling: Complete a court-approved credit counseling course within 180 days before filing.
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Means Test: Your income must fall below Michigan’s median income level for your household size. If it’s above, additional calculations assess your disposable income after necessary expenses.
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Filing Fee: Pay the required filing fee when submitting your bankruptcy petition
Make sure you take a look at the links at the end of this article to learn more about bankruptcy
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Qualifiers for Chapter 7 Bankruptcy:
- Unsecured Debts: Ideal for individuals with unsecured debts like credit card debt, medical bills, and personal loans.
- Income Limits: Current Michigan median income limits (as of 2025) for Chapter 7 eligibility:
- 1-person household: $62,161
- 2-person household: $76,158
- 3-person household: $95,969
- 4-person household: $117,799 (adjustments apply for larger households).
Filing Chapter 7 or Chapter 13 Bankruptcy?
Confused about it all? Hire an Attorney.
Previous Bankruptcy:
You cannot file if you filed Chapter 7 within the past 8 years or Chapter 13 within the past 6 years (unless repayment was at least 70% completed)
You can find more information on Michigan’s bankruptcy rules and guidelines below:
Rules, Regulations, and Laws:
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Automatic Stay: Upon filing, an automatic stay stops wage garnishments, creditor harassment, foreclosures, and repossessions.
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341 Meeting: Attend the 341 Meeting of Creditors, where you discuss your financial situation under oath.
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Exempt Property: Michigan law allows you to keep certain exempt property, such as your primary residence, vehicle, and personal belongings.
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Non-Dischargeable Debts: Certain debts cannot be discharged, including alimony, child support, certain taxes, and student loans.