Why Bankruptcies Are Rising in Michigan

Are you a Michigan resident feeling an overwhelming amount of financial strain? If so, you’re not alone. Michigan recorded its highest level of bankruptcies in 2025 since the COVID pandemic.

Michigan had 16,373 bankruptcies in 2025, which was 89 more than in 2024. And only 243 less than in 2020, when the state was under a lockdown and everyone’s way of life was altered.

There are many reasons bankruptcies are rising in Michigan. And if things keep going in the direction they’re heading now, 2026 doesn’t look to offer much relief.

The Reasons Bankruptcies Are Rising in Michigan

Many people are facing hard times. Some folks can’t afford basic groceries, others are trying to hold onto their homes, and the near-record number of cars being repossessed points to mounting financial strain. So, what’s happening?

Most people facing bankruptcy are dealing with a ‘perfect storm’ of factors. They may be struggling with inflation which has eroded their purchasing power and left them to rely on credit to cover even the most basic expenses. It doesn’t help that the Federal Reserve’s attempt to curb inflation has resulted in higher interest rates.

In addition, rising mortgage rates and housing costs have increased monthly expenses for homeowners and renters, while their incomes remain stagnant. This comes at the same time as the cessation of government stimulus programs and other pandemic relief measures  further weakening financial support.

Then there are folks losing their Affordable Care Act (ACA) subsidies who are facing higher premiums and opting out of health insurance altogether. This can easily lead to mounting medical debt.

Finally, the holiday and year-end spending may also be contributing to the financial stress some are experiencing at the beginning of 2026.

Fortunately, there are ways that bankruptcy can alleviate the stress of medical debt, credit card debt, loan debt, and more. All you need to do is contact our experienced bankruptcy attorneys to discover the ways bankruptcy could give you a fresh start in 2026.

Can You File a Bankruptcy on Your Own?

It’s understandable that you may want to avoid lawyer fees and want to file for bankruptcy on your own. But there are more than a few mistakes people make when it comes to filing for bankruptcy on their own.

One of the biggest mistakes people make is transferring assets or paying 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 people run up credit card bills just prior to 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. And many are entirely unaware that they must attend a required debt counseling program.

Another big mistake is failing to reveal all 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 very extreme instances.

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

Any of these transgressions, no matter how seemingly 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.

So, Then What About ‘Bargain’ Bankruptcy Attorneys?

Again, the desire to file for bankruptcy as cheaply and efficiently as possible makes sense to some. However, this approach is a slippery slope. Especially if you’re relying on the internet to conduct your search on following the bankruptcy process.

The internet is bursting with spam, marketing scams, and misleading information just to get more clicks. This makes it difficult to find honest and accurate information you may desperately need to make the right decision. The lines between reality/truth and marketing hype/false promises grow blurrier all the time. And if you’re under financial duress, you may be inclined to settle for less in your need to get the process started.

In the long run, you’ll save time and money by working with trusted and Southfield bankruptcy attorneys from our team who have decades of extensive experience.

Why Not Set Up a Free Consultation?

As bankruptcies are rising in Michigan, you may be considering one as a viable option for your current financial distress. It could be just what you need.

Whether you’re facing auto repossession, foreclosure, job loss, or surprise expenses, it won’t cost you anything to set up a FREE consultation with the attorneys at Gold, Lange, Majoros, and Smalarz.

Contact us today. And put our more than 135 years of bankruptcy law experience to work for you.