Michigan Bankruptcy Timeline

Struggling with debt? Bankruptcy could be the solution.

Repaying unmanageable debt may be, in some cases, a losing battle. Under these circumstances, it may be necessary for the debtor to rid themselves of this financial burden once and for all, and ultimately move forward with a clean slate—which can be done through a Chapter 7 or Chapter 13 bankruptcy. Although there are numerous alternatives that can be utilized to achieve a similar outcome, including debt consolidation, creditor negotiation and debt settlement, filing for bankruptcy would give an individual the opportunity to discharge most, if not all, of their debt. When faced with a dire financial situation, this is often the most practical solution. For this reason, you should not hesitate to explore your options with a Michigan bankruptcy lawyer at Hensel Law Office, PLLC if you have found yourself in a similar situation.

Preparing for Bankruptcy in Sterling Heights, MI

If you have made the decision to file for bankruptcy in Michigan, you will need to prepare for the process ahead. Although many people think that it starts when you submit your petition to the court, it is important to understand that the preparation phase begins as early as 180 days before filing. For this reason, our firm encourages you to review the steps below:

  1. Avoid Making Large Purchases: Many people assume that they can spend their money recklessly before filing for bankruptcy since their debt will soon be discharged. If you make large purchases or transfer substantial sums of money before filing, however, the bankruptcy court may think that you are attempting to commit fraud—which may lead to the dismissal of your case or a denied request for debt discharge.
  2. Take the Means Test: If you are interested in filing under Chapter 7 of the U.S. Bankruptcy Code, you will need to determine whether or not you are eligible. Since this process would eliminate most of your debt, it is strictly reserved for those who are in a dire financial situation. To find out if you qualify, you will need to take a means test—which determines how much disposable income you can contribute to repaying debt.
  3. Undergo Credit Counseling: Before filing your bankruptcy petition with the court, you will need to undergo credit counseling within the preceding 180 days. The course must be government-approved, as you will need to include a certificate of completion with your petition. This 90-minute course will help you to evaluate your financial situation, review some of the possible alternatives and create a personal budget plan.

Initiating & Completing the Bankruptcy Process

Once you are adequately prepared to file for bankruptcy, you can submit your petition with the court. It is important to understand that it may take several months to receive a discharge of debt, but you will be able to enjoy the protections of an automatic stay during that period of time. The bankruptcy timeline will subsequently continue on as follows:

  1. Automatic Stay Will be Ordered: Once your petition has been approved by the court, they will move quickly to order an automatic stay. This order will subsequently prohibit all creditors from continuing their collection efforts—which means that the foreclosure process will be halted, collection agencies will be barred from contacting you and your wages will not be garnished.
  2. Creditors Will be Notified: Approximately 7-10 days after you have filed, the court will notify all creditors of the bankruptcy by mail. You will also receive notice of when you will need to appear in court—wherein you will need to decide what debts you will continue to pay. If any of your creditors wish to dispute the impending discharge of debt, they would have 60 days to do so.
  3. Meeting with Creditors Will be Held: Approximately 30 days after filing, you will need to submit paperwork to the court indicated which debts you will continue to pay. Immediately after, you will be required to appear in bankruptcy court and meet with your creditors—if they choose to appear. This will start the discharge process, unless a creditor disputes a particular debt.
  4. Applicable Debts Will be Discharged: Approximately 60-90 days after your bankruptcy hearing, all applicable debts will be discharged. This may take longer if a creditor wishes to dispute the discharge of a particular debt, but you can expect to find relief within a few short months. Once the process has been concluded, you would no longer be protected by the automatic stay.

Still have questions? Call for a free consultation!

Still have questions about the bankruptcy timeline in Michigan? The legal team at Hensel Law Office, PLLC has the answers. We are available to sit down with you and discuss your case—whether you have already made the decision to file for bankruptcy or you are interested in finding a viable alternative—so you should not hesitate to take the first step today. All you will need to do is contact our office at (888) 258-0651 to take advantage of a free initial consultation. After that, we would be more than willing to meet you on the weekend or in the evening, but it is up to you retain the help that you will need. Contact the Michigan bankruptcy attorney at our firm today to get started.