Bankruptcy is sometimes the only legal solution in the presence of a large amount of debt. You can declare yourself financially incapable, which entails the inability to settle accounts with creditors and ease your debt burden. For the court considering your case to decide in your favor, you should know how to file for bankruptcy properly.
How to Apply
Bankruptcy courts, which are in each state district, deal with such issues. There are two in Michigan: Western, located in Grand Rapids, and Eastern in Detroit. Of course, there are lots of clerk’s offices in other cities as well. You cannot declare yourself bankrupt on your own; the court should do it. However, you may apply for this status without contacting specialists. To do it, you need to fill out the appropriate bankruptcy forms and provide other papers describing your current financial situation.
Since not all debts can be listed in a credit report, you may need additional papers providing info on your medical or personal liabilities. The difficulty of independent work is to collect all the available documents. That is why it is strongly recommended to contact professional bankruptcy lawyers in Michigan when planning on lightening your financial burden. They will help you with choosing a Chapter and filling out the forms you need.
Each bankruptcy case is individual. However, in general, the procedure consists of several main stages through which all debtors go through.
1. Collecting documents
With the help of all papers and forms, you provide the court with up-to-date information about the financial situation and the total amount of debts. Typically, the list of required records includes:
- statement of which Chapter you pick;
- credit report;
- tax returns (for two years);
- your income info;
- data on real estate, assets, vehicles, etc.
- bank account statements, and others.
Your lawyer will provide you with a detailed list after assessing your situation.
2. Credit counseling
It is a mandatory procedure for all debtors. This short informational course will help you better understand the bankruptcy procedure. Perhaps, with the new knowledge, you can find another solution to your problem. At the end of the consultation, you will receive a certificate, which should also be presented to the court.
3. Filing the case
When all the papers are collected, take the entire package to the court. A clerk will take all copies, give you the case number, and appoint a bankruptcy trustee in charge and a meeting date with the creditors, which is usually called a “341 meeting.” Your case and all the attached forms are submitted to the court after this stage, but the process cannot be considered fully completed.
You will have to take another counseling course, the purpose of which is to improve your financial literacy and attend a meeting with creditors, where you will be asked clarifying questions about your financial situation.
Work with Pros to Get Court Approval
While the process of filing for bankruptcy is not overwhelming, it’s best done with a professional. Filing pro se (on your own), you can miss important details and make the wrong choice with Chapter. A qualified lawyer will simplify your work and provide for all the pitfalls.