Filing Bankruptcy in Dearborn, Michigan
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Written by the Upsolve Team.
Updated September 29, 2020
Living within a few miles of one of the largest cities in America is both exciting and expensive. There is a lot to do in and around Dearborn, but if you are struggling to make ends meet, it’s hard to enjoy the opportunities that this community provides. Thankfully, there are financial tools you can use that are designed to help Americans like you get back on solid financial footing. A Chapter 7 bankruptcy in Dearborn can erase your debts so that you can focus on your family, your community, and building a strong financial future. The world can look much brighter when you’re not always worried about where this month’s debt payments are going to come from. You may be wary to pursue filing bankruptcy in Dearborn because bankruptcy has historically been stigmatized. However, this public perception has changed dramatically since the Great Recession of 2008. Americans now understand just how precarious the average hardworking family’s finances are, through absolutely no fault of their own. When a single accident, illness, job loss, or death in the family can cause financial disaster, communities often show bankruptcy filers great compassion. Partially because more people now understand the benefits and the necessity of bankruptcy, this process has proven to be a powerful financial tool for many residents of the Wolverine State.
Filing bankruptcy in Dearborn is a fairly straightforward process. If you choose to file Chapter 7 bankruptcy and your finances are not very complex, you can even complete the process without hiring an attorney. To determine which kind of bankruptcy process may work best for your family, you’ll need to carefully examine your financial circumstances. Specific kinds of bankruptcy are available to individuals and families who meet specific income limits. Similarly, some filers choose one kind of bankruptcy over another due to the kinds of debts and assets they have. Filing bankruptcy under Chapter 13 makes it easier to make your monthly debt payments. By contrast, filing bankruptcy under Chapter 7 eliminates many kinds of debt almost immediately so that you no longer have to pay your creditors back. If you don’t own a lot of expensive property and you don’t make much money, you may especially benefit from filing for Chapter 7 bankruptcy in Dearborn. This option gives you the clearest path forward to a fresh financial “restart.”
Dearborn Bankruptcy Lawyers – Estimated Cost
One of the most urgent questions that individuals thinking about filing bankruptcy in Dearborn worry about is “How much does a Dearborn bankruptcy lawyer cost?” The cost of a bankruptcy lawyer depends on your location, the type of bankruptcy you are filing for, and the complexity of your financial situation. For example, if you’re a member of a lower-income household and don’t have much unusually valuable property, the process of filing for Chapter 7 is usually so straightforward that you can complete necessary bankruptcy paperwork yourself. However, if your finances are more complex or you prefer to hire bankruptcy help in Dearborn to more easily navigate the bankruptcy process, you can probably do so for between $1,100 and $1,250. If you choose to hire a lawyer, you can schedule a consultation with a few candidates before you pick the one that is right for you. Many lawyers offer consultations for free.
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How to File Bankruptcy in Dearborn, Michigan for Free
If you’re interested in filing for Chapter 7 bankruptcy in Dearborn, please read over the following information about completing bankruptcy documents, attending credit counseling, and navigating the Michigan bankruptcy process generally. If you choose to, you should be able to confidently file for Chapter 7 bankruptcy on your own.
Collect Your Dearborn Bankruptcy Documents
What makes filing bankruptcy in Dearborn somewhat time-intensive is all the paperwork the Court requires you to submit before it decide whether bankruptcy relief is appropriate in your case. You can access all the forms you need to file Chapter 7 bankruptcy in Dearborn on the website for the U.S. Bankruptcy Court for the Eastern District of Michigan. These forms will need to be physically printed out because the Court won’t allow you to submit them online. Before you can complete the forms, you’ll need to gather some personal documents related to your finances. For example, the Court will ask you to submit a complete list of your debts and creditors. To create that list, you’ll need to request a free copy of your credit report from at least one of the three major credit reporting agencies. By referencing your credit report, you’ll be able to create your list of debts and creditors quickly and accurately. Also, you’ll want to have copies of any pay stubs received over the past few months and recent bank statements so you can accurately report your income and your spending.
Take Credit Counseling
At sports bars all over Dearborn, conversations turn again and again to the coaching staff of the Lions, Tigers, and Wolverines. Why? Because Michigan fans understand that good coaching leads to successful teams. Similarly, successful Dearborn bankruptcy cases benefit from good credit counseling. Credit counseling allows you to understand your debt-relief options so that you can be sure Chapter 7 bankruptcy in Dearborn is the best choice for you. Credit counseling is generally conducted online. When choosing a credit counseling program, make sure that it has beenapproved by the Department of Justice for the Eastern District of (Michigan has 2 districts) or your participation won’t “count” for the purposes of your case.
Complete the Bankruptcy Forms
When thinking about how to file bankruptcy in Dearborn, you may be overwhelmed by all the paperwork involved. Know that the paperwork that the Court requires is almost always straightforward and is accompanied by clear directions for every step. Chapter 7 bankruptcy in Dearborn is a relatively straightforward process if your finances aren’t unusually complex. That’s why you’ll likely be able to complete the process of filling out the necessary paperwork on your own, without an attorney’s assistance. Although being intimidated by the process of filing for bankruptcy is normal, there is no reason to feel stressed about the practical steps involved in seeking debt-relief in this way.
Get Your Filing Fee
Filing bankruptcy in Dearborn under Chapter 7 requires the submission of a $338 filing fee. However, certain low-income filers may qualify for a fee waiver so that they can file their cases for free. In general, applicants for bankruptcy relief under Chapter 7 will be granted a fee waiver if they live below 150% of the poverty line. These applicants must also be unable to pay the fee in installments even after the automatic stay protections go into effect after filing bankruptcy in Dearborn. Therefore, if your household is low-income and you can’t afford to pay the fee in installments even after you stop paying your creditors, you should qualify for a fee waiver.
Print Your Bankruptcy Forms
You’re not allowed to file your Dearborn bankruptcy case online. When preparing your case, you will need to physically print all the forms the Court requires. If you don’t have easy access to a printer, you may benefit from visiting one of the 3 neighborhood branches of theDearborn Public Library. The library provides computers and printers for the public to use. You will likely need to pay a small fee to print out all necessary pages. Make sure that you print out everything you need at once so that you don’t have to make multiple trips back and forth to the library.
Go to Court to File Your Forms
Chances are that one of the reasons you live in Dearborn is that it’s so close to Detroit. You likely travel to Detroit fairly regularly. Get ready for another trip into the city because Dearborn is part of the Eastern District of Michigan and the courthouse where you’ll need to file your bankruptcy paperwork is located in Detroit. Visiting a courthouse can seem intimidating at first. But as long as you bring an ID and two copies of all the forms you need for filing bankruptcy in Dearborn, you have nothing to worry about. The Court even provides detailed directions and parking information on its website.
Mail Documents to Your Trustee
You aren’t quite done with your bankruptcy paperwork after you’ve filed it with the Court. Next, you need to mail copies of certain supporting documents to your Trustee. When filing Chapter 7 bankruptcy in Dearborn, the Court appoints a Trustee to conduct a meeting between you and any of your creditors who choose to attend the gathering. To prepare to ask you questions during that proceeding, your Trustee needs to examine your bankruptcy paperwork, including your most recent income tax return and recent paycheck stubs. It’s your responsibility to send requested documents in specific formats to your Trustee after your paperwork has been filed with the Court and an individual Trustee has been assigned to your Michigan bankruptcy case.
Take Bankruptcy Course 2
When you attended your pre-filing credit counseling class, you learned about different debt-relief options. Now it’s time to learn about how to make the most out of the option you’ve chosen. The Court requires you to take a debtor education course approved by the Department of Justice for your district. This course will teach you how to take advantage of your much lighter debt obligations post-bankruptcy so that your Dearborn bankruptcy creates a solid foundation for your financial future. Bankruptcy is a great option for short-term debt-relief, but after months, or possibly even years of bad credit, you’ll want to be proactive in rebuilding it. Learning how to rebuild your credit and use your lighter debt load to your advantage can help change your finances for the better, for good.
Attend Your 341 Meeting
The Trustee that the Bankruptcy Court appoints to oversee parts of your case will conduct a meeting that you must participate in before your debts can be discharged. This meeting is one of the most anxiety-inducing aspects of filing bankruptcy in Dearborn for many people, but it shouldn’t be. The Trustee just needs to ask you some questions about your finances while you are under oath. This is to make sure the information your provided about your finances is both clear and accurate before the Court decides whether to approve your request for bankruptcy relief. Your creditors are invited to attend the meeting, but unless your debts are particularly complex, it’s more likely that it will just be you and your Trustee sitting in on this meeting. The most important part about preparing for your 341 meeting is to make sure that you have a picture ID and your original social security card.
Dealing with Your Car
It can be difficult to navigate daily life while battling the severe weather that the Midwest is known for if you don’t have a car to get you from place to place. Chances are, you want to keep your car safe from your creditors while you are filing bankruptcy in Dearborn and into the future. If you don’t owe money on your car and an available exemption is more than the car’s total value, you can keep your car, no problem. But if you’re still making payments on a loan, the Court will present you with three options: reaffirm your debt, redeem the car, or surrender your car. Surrender means giving your car back to your creditor so that you no longer have to make payments on your debt. Redemption means “making good” on the market value of your car in one payment and discharging the balance. Reaffirmation involves agreeing to make all remaining payments on your loan on-time and per the terms of your loan agreement.
Michigan Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Dearborn
Michigan Means Test
Not everyone is eligible to file for Chapter 7 bankruptcy in Dearborn. To qualify for this opportunity, you’ll need to pass the Michigan bankruptcy Means Test for Chapter 7. The Michigan bankruptcy Means Test evaluates a debtor’s income and expenses to see whether they fall within specific income limits outlined in the Bankruptcy Code. Essentially, the larger your household is, the more you’re allowed to make in income (and set off in expenses) to show that you’re eligible for Chapter 7 relief. This test helps to ensure that only low-income households receive the generous benefits associated with Chapter 7 bankruptcy.
Median Income Levels for Michigan
Michigan Median Income Standards for Means Test for Cases Filed In 2023 | ||
|---|---|---|
| Household Size | Monthly Income | Annual Income |
| 1 | $4,695.25 | $56,343.00 |
| 2 | $5,846.92 | $70,163.00 |
| 3 | $7,020.42 | $84,245.00 |
| 4 | $8,653.17 | $103,838.00 |
| 5 | $9,478.17 | $113,738.00 |
| 6 | $10,303.17 | $123,638.00 |
| 7 | $11,128.17 | $133,538.00 |
| 8 | $11,953.17 | $143,438.00 |
| 9 | $12,778.17 | $153,338.00 |
| 10 | $13,603.17 | $163,238.00 |
Poverty Levels for Michigan
Michigan Fee Waiver Eligibility for Cases Filed In 2023Eligible for fee waiver when under 150% the poverty level. | ||
|---|---|---|
| Household Size | State Poverty Level | Fee Waiver Limit (150% PL) |
| 1 | $1,132.50 | $1,698.75 |
| 2 | $1,525.83 | $2,288.75 |
| 3 | $1,919.17 | $2,878.75 |
| 4 | $2,312.50 | $3,468.75 |
| 5 | $2,705.83 | $4,058.75 |
| 6 | $3,099.17 | $4,648.75 |
| 7 | $3,492.50 | $5,238.75 |
| 8 | $3,885.83 | $5,828.75 |
| 9 | $4,279.17 | $6,418.75 |
| 10 | $4,672.50 | $7,008.75 |
Michigan Bankruptcy Forms
The Court that oversees Chapter 7 bankruptcy in Dearborn requires debtors to physically print their Michigan bankruptcy forms; online filing isn’t an option that is available at this time. When you first look at the forms you need, they will seem complex. In this case, looks are deceiving. The easy-to-follow directions for these forms make them much less intimidating once you dig into them. The Court doesn’t require any special local forms to be filed in addition to the standard national forms, so this makes filing bankruptcy in Dearborn particularly straightforward.
Michigan Exemptions
Everyone who files for Dearborn bankruptcy keeps eligible property safe from creditors through exemptions. Trustees can’t sell any property protected by Michigan bankruptcy exemptions for the benefit of creditors, even if the debtor can’t pay those creditors anything at all. If you’re a member of a low-income household, you should be able to keep most or all of your property safe from sale by your Trustee. Michigan does allow filers to choose whether to take advantage of federal bankruptcy exemptions or Michigan bankruptcy exemptions. You must choose one or the other, as the Court will not allow you to “mix and match.”
