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What Is the Average Cost of Bankruptcy in Michigan?

If you are thinking about filing for bankruptcy in Michigan, it is understandable to be worried about the actual expenses involved. Finding extra money for these fees is a challenging task if you are already struggling to make ends meet. Here is what you need to know about what you can expect to pay when going through the bankruptcy process in Michigan.

All Costs Associated with Bankruptcy in Michigan

Even though you may be concerned about the costs associated with bankruptcy, understanding what you can expect will help alleviate some anxiety. Additionally, it’s a common belief that the benefits of bankruptcy, particularly eliminating debt, outweigh any potential costs. The average cost of Bankruptcy in Michigan is not a set amount, as it will depend on the type of bankruptcy, legal fees, filing fees, and other related expenses. The best way to get an estimated cost for your situation is to contact an experienced bankruptcy lawyer. Some potential expenses related to bankruptcy are:

  • Filing Fees
  • Credit Counseling and Debt Education Courses Costs
  • Attorneys Fees
  • Means Tests
  • Obtaining Credit Reports 
  • Notary Fees
  • Mailing Expenses

Do I Need a Lawyer to File Bankruptcy in Michigan?

It is not legally required to use an attorney for bankruptcy in Michigan. However, bankruptcy is a notoriously technical process, and even knowing where to start or which type of bankruptcy to file can be difficult unless you have experience in the area. Hiring a bankruptcy lawyer might seem like an extra expense when you are already tight on money, but the right attorney can save you considerable time, money, and stress and ensure your bankruptcy filing is done correctly and without issues that could affect you down the road. Here is how a Michigan bankruptcy attorney can help:

  • Assessing your financial situation
  • Determining which type of bankruptcy is appropriate, if any
  • Preparing and filing the bankruptcy petition
  • Completing and filing required bankruptcy schedules and forms
  • Representing you at the meeting of creditors
  • Communicating with your creditors on your behalf
  • Advising you on exemptions to protect your assets
  • Handling any objections from creditors or trustees
  • Guiding you through the credit counseling requirement
  • Advising you on how to handle bankruptcy litigation if it arises
  • Assisting with the formulation of a repayment plan in Chapter 13 cases
  • Negotiating terms with creditors in a Chapter 13 plan
  • Representing you in any adversary proceedings related to the bankruptcy

Filing Fees for Chapter 7 and Chapter 13 Bankruptcy in Michigan

The most well-known cost associated with bankruptcy is the fees to cover the court’s costs for processing your case. This is a necessary payment to start the bankruptcy process. Let us review the standard fees for Chapter 7 and Chapter 13 bankruptcy, the most common types of consumer bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is often called a “liquidation” bankruptcy. This type of bankruptcy allows you to erase most types of debt, like credit cards or medical debt, by selling off assets to pay off your creditors. This is the more expedient of the two primary forms of consumer bankruptcy. 

Court fees for Chapter 7 are $338. This includes a $78 administrative fee, a $15 petition fee, and a $245 filing fee. 

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, often referred to as a “wage earner’s plan,” allows individuals with a regular income to develop a plan to repay all or part of their debts. This type of bankruptcy appeals to those who have a steady income and wish to avoid the liquidation of their assets. Chapter 13 takes longer – three to five years – but is useful if you are behind on a loan and want to catch up to avoid repossession. If your income is above a certain level, Chapter 13 is your only option.

Chapter 13 process starts with filing a petition in bankruptcy court and paying court fees of $313. This includes the same $78 administrative fee for Chapter 7 plus a $235 filing fee.

Can I Have These Fees Waived or Reduced If I Cannot Afford Them?

Yes, the court might waive your bankruptcy filing fees in certain circumstances. To have your fees waived, you must show that your income is less than 150 percent of the federal poverty line. If you do not qualify for a full waiver but still cannot pay the fee upfront, the court might allow you to pay in installments. A bankruptcy attorney can help you determine whether you qualify for a waiver or installment plan.

Contact a Michigan Bankruptcy Attorney Now

Considering bankruptcy in Michigan? Learn more about your options in an initial consultation session with the attentive team at Marrs & Terry.