Bankruptcy in Michigan is a legal procedure through which some of the debts of an individual or a business are discharged (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult process. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good Michigan bankruptcy Attorney can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your individual case.
Types of Bankruptcy in Michigan
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in Michigan will be the same as anywhere else in the United States. There are 2 basic types of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy typically used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
Chapter 7 bankruptcy in Michigan is sometimes called "liquidation" because it involves the forced sale of some (though certainly not all) of the debtor's assets. The bankruptcy court will appoint a trustee to oversee the appraisal and sale of some of the debtor's property, and the proceeds from the sale will go to the creditors, in their order of priority. Certain types of property are exempt, and do not need to be sold, including houses and insurance policies. Once the property is sold, and the proceeds given to the creditors, the rest of the debt is discharged. Chapter 13 bankruptcy typically reorganizes, rather than discharges, one's debts. Basically, the court will come up with some type of repayment plan, independent of the terms of the agreements that created the debt in the first place (superseding any acceleration clauses). This is meant to give the debtor some breathing room, allowing them to repay their debts over time, without facing financial ruin in the process.
Chapter 11 bankruptcy is typically used by businesses. It also involves reorganization of debts, similar to chapter 13 bankruptcy. It requires the debtor company to come up with a reorganization plan, which its creditors must vote on for approval. If it is approved, the company will then be legally obliged to carry it out.
How Can a Michigan Bankruptcy Lawyer Help?
Filing for bankruptcy is a very big decision, frought with risks. However, in some cases, the benefits might outweigh the costs. Because of this, it is important to seek the advice of a Michigan bankruptcy Attorney, who can advise you of the likely consequences of filing, and whether or not doing so is likely to benefit you.
Interesting Facts About Michigan
Michigan has a population of over 9 million people and is the 8th most populated state in the U.S. The name "Michigan" means "large lake". In the year 1837, Michigan became the 26th state to officially join the Union. The Michigan State Capitol is located in the city of Lansing in Ingham County.
Michigan's court system is comprised of three levels, each serving a different purpose. At the lowest level are the District Courts, Municipal Courts, and Probate Courts. Appeals and higher matters are heard at the intermediate level through the Circuit Court system. Michigan also operates a Court of Claims at the intermediate level, which hears administrative agency appeals involving claims against the state. Michigan's highest court is the Michigan Supreme Court.
Aside from hearing advanced legal claims, the Supreme Court also operates the Michigan Supreme Court Historical Society, dedicated to the preservation of Michigan's rich legal history. A famous Michigan court case is Workman v. Detroit Board of Education (1869), one of the first cases dealing with segregation in education. Another famous Michigan case is the Dr. Kevorkian trial involving assisted death and euthanasia. In 1846, Michigan was the first U.S. state to abolish the death penalty.
Lawyers in Michigan file most of their claims at the District or Municipal Court level. Michigan lawyers are experienced in a broad range of legal topics, allowing them to address the unique legal needs of the community. Michigan continues to promote its rich tradition of legal excellence and service.