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How the personal bankruptcy process works

On Behalf of | Mar 20, 2023 | Personal Bankruptcy

A personal bankruptcy process is a federal option that Michigan residents can use for relief from overwhelming debt. Personal bankruptcy must be filed in court and approved by a judge. For people considering filing, looking at the process helps you decide what’s best.

The first part of the process evaluates eligibility by determining means and submission forms. Once the process begins, it’s straightforward in most cases. Filing for personal bankruptcy is a daunting task for a novice and requires a complete understanding of the laws, filing deadlines, fees and more.

Are you eligible for personal bankruptcy?

People faced with significant debt and barraged by collection calls, letters, and emails want immediate relief and filing bankruptcy might be the ultimate option.

The eligibility process includes a look at your total debt, means to pay, the value of your assets and which debts are dischargeable. Some debts like child support and back taxes are not dischargeable in bankruptcy.

Court-ordered credit counseling must be completed within 180 days of filing, or your case will be dismissed.

Supply the court with accurate financial information

The most crucial part of filing for bankruptcy is fully submitting all asset information. In stressful situations, it’s difficult to remember everything.

Writing a list of all assets and income sources, including earnings from work or business, savings, investments, 401ks, and any other pension, property, jewelry or any item of value helps you avoid forgetting important information.

The court views excluded financial resources as a possible attempt not to disclose assets. Holdings that you own jointly with others should also be included. A bankruptcy trustee will evaluate your assets to determine if any can be used to settle all or part of your debt.

Once everything is submitted, evaluated and accepted, the court will approve your bankruptcy claim.