Should You File for Chapter 7 Bankruptcy in Michigan Without a Lawyer?

If you’re deep in debt, you may be considering filing for bankruptcy. And your financial situation may have you convinced that you should file for Chapter 7 bankruptcy in Michigan on your own.

This can be a huge mistake.

Filing for bankruptcy isn’t like doing a DIY project with instructions and steps you find on YouTube. And many people who attempt it find themselves far over their heads  when they realize they really need expert help. By then, it may be too late to fix the missteps and there’s simply no going back in the bankruptcy process.

The Steps of Filling for Chapter 7 Bankruptcy in Michigan

The process of filing for bankruptcy is not for the faint of heart. In a nutshell, you’ll need to first complete a credit counseling course that’s been approved by the U.S. Department of Justice before you can file.

Next, you must pass a means test to clarify what portion of your debt you can actually pay. You’ll need to file a petition and provide a handful of financial documents that report the following:

• Current income
• Property owned in the last two years
• Exempt property (see below)
• Debt and creditors
• Living expenses
• Financial transactions within the last two years

Once all of that is in place, you’ll work with a court-appointed trustee who will examine all your debt, assets, and property, as well as meet with your creditors. He or she will directly impact what you pay back to your creditors by liquidating or selling your non-exempt property.

Finally, you’ll need to understand there are some payments the court will not discharge such as child support, alimony, student loan debt, back taxes, and any debt you’ve incurred via illegal means.

Sound like a lot? It is. And that’s just an overview of the whole process.

So, Can You Really File for Chapter 7 Bankruptcy in Michigan Without a Lawyer?

Well, sure. But should you? That’s another question altogether.

There are many advantages to having a qualified bankruptcy lawyer on your side.

For example, are you aware of the eligibility criteria for filing bankruptcy in Michigan? Spoiler alert – it requires some math. To determine if you qualify, you’ll first need to calculate your average monthly income over the past six months. Then you multiply that number by 12 to get your annual income. Whatever number you get, you’ll compare that to the income charts on the U.S. Trustee’s website.

If you make less, you qualify. If you make more, you could still qualify if you’re able to pass the second part of the above-mentioned means test. Sound confusing? You’re not alone in this. Yet, it’s well-traveled territory for a bankruptcy lawyer.   

Even if you feel confident that you can file for bankruptcy without an attorney, you should know that there are risks involved that could easily derail the entire process and cause some serious trouble.

Common Mistakes When Filing for Bankruptcy Without an Attorney

There are more than a few mistakes people often make when it comes to a  DIY approach to bankruptcy.

Given that filing for bankruptcy can be a scary venture, some people are tempted to transfer assets or pay off debts to family members or friends before filing. This is considered an avoidable transfer and may have serious consequences for both you and others. Some debtors may not reveal all their assets or disclose all fees and services owed. Concealing any of this information can jeopardize the chance of obtaining financial relief and may result in criminal prosecution in extreme instances.

Some bankruptcy DIYers aren’t aware that they have to attend the required debt counseling program. Others run up their credit card bills just prior filing for bankruptcy under the assumption that they’ll be forgiven those debts. Some may try to pay off credit card debt with retirement funds before declaring bankruptcy. Whatever the case, creditors see these behaviors and suspect foul play.  

Even just filing for bankruptcy in the wrong chapter (typically 7 versus 13) can create its own brand of havoc.

Any of these transgressions, no matter how innocent, can have negative repercussions ranging from having your petition denied, to the bankruptcy trustee being forced to recover assets you transferred to friends or family members, to the very real risk of facing charges that could lead to fines and even jail time.

Consider All the Angles When Filing for Bankruptcy

If you file for Chapter 7 bankruptcy in Michigan without a lawyer, you’re taking a big chance with your financial future.

The guidance you’ll get from an expert attorney on how to file for bankruptcy will ensure you do not make errors that could lead to the dismissal of your petition… or something even worse.

So contact us today if you’re ready to take your bankruptcy seriously. We certainly are.