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Many Americans are barely hanging on financially and are just one major expense or an illness away from economic ruin. If you are considering bankruptcy, we recommend you speak with an attorney who has a thorough knowledge of the process.

Which Personal Bankruptcy Structure in Best?

If you need to file for personal bankruptcy, you have a couple of options to choose from based on why they need to file, how much debt they have and how much monthly income they have including wages, alimony or other financial support.

Chapter 7 Liquidation

Chapter 7 bankruptcy is called liquidation because the filer must sell of high-dollar assets to pay their debtors. If Chapter 7 is the bankruptcy structure you choose, you won’t have a payment plan to keep up with, and the entire process is relatively quick. But you might have to sell off many of your assets.

Chapter 13 Debt Consolidation

Chapter 13 bankruptcy allows you to pay off your debts over a three to five-year period. A bankruptcy judge will look at your income and debts and come up with a structured payment plan. While your case is still in bankruptcy court, your creditors are not allowed to use collection tactics.

You and y is a plan that allows you to pay off your debts through a structured payment plan that lasts between three and five years. During that time, your creditors are not allowed to pursue collection efforts. Chapter 13 bankruptcy will allow you to keep your home and auto and will improve your credit rating.

Property Exemptions in Michigan Include:  

Homestead exemption- Any equity on your home up to $37,000

Automobile exemption- Your personal vehicle up to $3,475.

Household computer up to $600

Can I Have My Debts Discharged?

When you file for bankruptcy, you are asking the U.S. bankruptcy court to eliminate or discharge a fraction or all your debt. If the bankruptcy court decides to discharge your debts, your balances will be zeroed out, and your debtors must cease all collection activities.

The following debts may be discharged in bankruptcy:

Car loan balances after repossession

Business-related debts

Civil suit awards for personal injury and property accident claims

Credit card debt

Foreclosure balances

When your debts are discharged, you are no longer liable for the balance, and all collection activities must cease.

Which Debts Cannot Be Discharged in Bankruptcy?

Not all debts can be dismissed by filing for personal bankruptcy. Non-dischargeable debts include:


Child Support

Student Loans


In rare instances, if you are able to demonstrate that the above debts are an extreme hardship, you may have them reduced or dismissed.

Speak to a Bankruptcy Attorney in Michigan

We’ve only discussed some of the basics of filing for bankruptcy in Michigan. Every type of structure, whether you choose Chapter 7, Chapter 11, or Chapter 13 bankruptcy, is complicated and to get the most from your efforts, you need to choose the right process and follow all the rules. If you must file for bankruptcy, you need to enlist an attorney immediately.