How to File Bankruptcy in Michigan – Step 4

Bankruptcy Information – Debts

Michigan Means Test

The new bankruptcy laws enacted in 2005 also require that debtors pass a means test before filing a Chapter 7 bankruptcy. There are two ways to pass the means test:

1. the debtor’s annual income (calculated using the average gross income for the six month period prior to filing) must be below the state median. Census Bureau statistics for state median income by family size can be found here (for cases filed on or after March 15, 2011).

2. If income exceeds the median income, individuals may still file Chapter 7 bankruptcy based on results of Form 22A: Chapter 7 Statement of Current Monthly Income and Means-Test Calculation

Other documents sometimes required, that you should get a hold of are as followed:

  • A recent bill from each creditor or a list of creditors and the amount you owe
  • Mortgage information, including interest rate and payoff for any loans secured by your house
  • Car loan information, including interest rate and payoff for each vehicle £ Delinquent tax notices
  • Unpaid property tax notices
  • Information regarding any lawsuits or judgments filed against you
  • It is also important to provide any requested bankruptcy info to your free legal services officer as soon as possible so that he or she can make a determination regarding whether you can even file a Chapter 7 bankruptcy petition. Under the new bankruptcy laws, there are restrictions:
  • Your current monthly income (average income received in the six months prior to filing bankruptcy) must not be more than the state median; or If your current monthly income is more than the state median, then a means test is used to determine whether a Chapter 7 bankruptcy filing is presumed to be an abuse of the Bankruptcy Code.

If your current monthly income is more than the state median, then a means test is used to determine whether a Chapter 7 bankruptcy filing is presumed to be an abuse of the Bankruptcy Code.

 

How to File Bankruptcy in Michigan – Step 1
How to File Bankruptcy in Michigan – Step 2
How to File Bankruptcy in Michigan – Step 3
How to File Bankruptcy in Michigan – Step 5
How to File Bankruptcy in Michigan – Steps 6 to 10

_______________________________________________________________
While the information presented is accurate as of the date of publication, it should not be cited or relied upon as legal authority. It should not be used as a substitute for reference to the United States Bankruptcy Code (title 11, United States Code) and the Federal Rules of Bankruptcy Procedure, both of which may be reviewed at local law libraries, or to local rules of practice adopted by each bankruptcy court. Finally, this publication should not substitute for the advice of competent legal counsel.