How Much Does It Cost to File Bankruptcy in Michigan?

The cost to file bankruptcy in Michigan depends on the type of bankruptcy. For Chapter 7, court filing fees are $338, and attorney fees typically range from $1,200 to $2,000. For Chapter 13, the court filing fee is $313, and attorney fees average between $3,000 and $5,000. Additionally, credit counseling and debtor education courses cost between $20 and $100.

If you’re considering bankruptcy but curious about the costs involved in Michigan, it’s essential to understand the financial commitment of filing for bankruptcy. The costs associated with filing can vary based on the type of bankruptcy and other court-related expenses.

Because of the numerous advantages you gain when retaining a Michigan bankruptcy lawyer, it’s also important to consider attorney’s fees and legal costs.

This article focuses on costs for Michigan, it will be beneficial for anyone comparing these expenses to other bankruptcy costs in other US states. Below, we break down the primary factors affecting how much it costs to file for bankruptcy.

What Is the Fee to File Chapter 7?

Filing for Chapter 7 bankruptcy requires paying certain fees. These include both court filing fees and legal fees if you decide to work with an attorney. In Michigan, the current court filing fee for Chapter 7 bankruptcy is $338.

This fee covers the basic administrative costs of processing the bankruptcy case. However, if you’re struggling financially, you may be eligible for a fee waiver or a payment plan, depending on your income.

Chapter 7 is often referred to as “liquidation bankruptcy” because your assets may be sold to satisfy your debt to creditors. It’s essential to account for this filing fee when planning your bankruptcy. In comparison, certain regional factors, such as the local economy and the demand for legal services, could influence attorney fees more dramatically in high-cost areas like Detroit or Grand Rapids.

Average Chapter 7 Bankruptcy Attorney Fees

Hiring an attorney is not a legal requirement for filing bankruptcy, but it is highly recommended due to the complexities involved. Attorney fees for Chapter 7 bankruptcy in Michigan range between $1,000 and $1,500 on average. The cost may fluctuate based on the complexity of your case, the experience of the attorney, and even the region where the lawyer practices.

More experienced attorneys or firms with a high success rate may charge higher fees, but they often offer better insights into handling your case smoothly. When choosing a bankruptcy attorney, consider both the expertise they bring and the payment plans they may offer to make their services more affordable.

Chapter 7 Flat Fees vs. Hourly Fees

When it comes to bankruptcy attorney fees, many lawyers charge either a flat fee or an hourly fee. Flat fees are typically preferred for Chapter 7 cases since they offer clients a predictable cost upfront. In Michigan, the flat fee structure for Chapter 7 attorneys is standard practice, with most charging between $1,000 and $1,500, depending on the complexity of the case. This amount generally covers all services, including consultation, document preparation, and court representation.

Hourly rates, on the other hand, can vary widely. Some attorneys may charge between $200 and $400 per hour, but most opt for flat fees for bankruptcy due to the relatively straightforward nature of Chapter 7 cases. Hourly rates can be higher, particularly in metropolitan areas. Thus, if you’re seeking bankruptcy assistance in Michigan, inquire whether a flat fee arrangement is available to avoid unexpected costs as your case progresses.

Do Higher Chapter 7 Attorney Fees Mean a Lawyer Is Good?

Attorney fees for Chapter 7 bankruptcy in Michigan range from $1,200 to $2,000. While it’s tempting to assume that higher fees mean better service, that’s not always the case. It’s essential to find a bankruptcy attorney who is experienced, trustworthy, and willing to communicate clearly with you. In many cases, local bankruptcy attorneys in Michigan offer free consultations, which can help you assess their expertise before making a decision. Remember, affordability and quality service are both critical when choosing an attorney.

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Chapter 13 Bankruptcy Court Fees and Legal Costs

Chapter 13 bankruptcy operates differently from Chapter 7, and so do the costs. The court filing fee for Chapter 13 bankruptcy in Michigan is currently $313, slightly lower than that of Chapter 7. However, Chapter 13 is a “reorganization bankruptcy,” where debtors commit to a repayment plan over three to five years. This means the overall costs can add up as the case requires ongoing court supervision.

In Michigan, attorney fees for Chapter 13 bankruptcy are generally higher due to the extended nature of the case. These fees typically range from $2,500 to $4,000, as the lawyer must continuously oversee the repayment plan, file necessary documents, and represent the client in court throughout the case’s duration.

How Much Do Bankruptcy Attorneys Charge for Chapter 13 Bankruptcy?

When filing for Chapter 13 bankruptcy in Michigan, attorney fees are a key cost to consider. The average attorney fee for Chapter 13 cases in Michigan typically ranges from $3,000 to $5,000. The actual amount can depend on the complexity of your case, your location within Michigan, and the attorney’s experience. Chapter 13 cases often require more work for the attorney because they involve creating a payment plan to reorganize debt over a three to five-year period.

How Are Chapter 13 Attorney Fees Paid?

The good news for Michigan residents is that Chapter 13 attorney fees are usually included in the repayment plan. This means you don’t have to pay the entire amount upfront. Instead, the fees are spread out over the duration of your bankruptcy repayment plan, making the process more manageable. However, you will still be responsible for paying the court filing fee, which is $313 as of 2024. This fee must be paid when filing your Chapter 13 petition.

Comparison of Chapter 7 and Chapter 13 Bankruptcy Costs and Requirements in Michigan

Understanding the costs and requirements for filing bankruptcy can help you make an informed decision about which option best suits your financial situation. The table below offers a side-by-side comparison of Chapter 7 and Chapter 13 bankruptcy in Michigan, detailing essential factors such as filing fees, attorney costs, eligibility, and the impact on assets.

Aspect	Chapter 7 Bankruptcy	Chapter 13 Bankruptcy
Filing Fee	$338	$313
Attorney Fees	$1,200 – $2,000	$3,000 – $5,000
Payment Options for Attorney Fees	Typically paid upfront	Can be included in the 3- to 5-year repayment plan
Credit Counseling & Debtor Education	Required (costs $20 – $100)	Required (costs $20 – $100)
Eligibility	Based on income; must pass the means test	Available to individuals with a stable income
Duration of Process	3 to 6 months	3 to 5 years
Impact on Assets	Non-exempt assets may be liquidated to pay creditors	Allows debt reorganization without liquidating assets
Purpose	Discharges unsecured debts like credit cards and medical bills	Sets up a repayment plan to pay off debts over time
Advantages	Quick debt relief; discharges most unsecured debt	Allows you to keep property and assets; manageable payment plan
Disadvantages	Some assets may be sold; impacts credit for 10 years	Lengthy repayment period; impacts credit for 7 years
Fee Waiver Eligibility	Available if income is below 150% of Michigan poverty guidelines	Not typically available; fees are part of the repayment plan

For those considering bankruptcy, this comparison provides a clear snapshot of what to expect with each type of bankruptcy. Chapter 7, often called “liquidation bankruptcy,” is ideal for individuals seeking a quick discharge of unsecured debts, but it may involve selling non-exempt assets.

On the other hand, Chapter 13 allows for a structured repayment plan, letting individuals retain property by repaying their debts over three to five years. This option is beneficial for those with stable income looking for manageable monthly payments.

Fee Waiver Eligibility and Payment Options

If your income is below 150% of Michigan’s poverty level, you can apply for a fee waiver. For Chapter 13 bankruptcy, attorney fees can be paid in installments over the course of the three- to five-year repayment plan, reducing the immediate financial burden.

What Other Bankruptcy Costs Should I Account For?

Beyond attorney fees, there are additional costs to consider when filing for bankruptcy in Michigan. Court filing fees are standard across the state: $338 for Chapter 7 bankruptcy and $313 for Chapter 13.

Additionally, you’ll be required to complete credit counseling and debtor education courses, which typically cost between $20 and $100 for both. Other potential expenses may include fees for obtaining your credit report, hiring appraisers for your assets, and any additional legal costs if your case is particularly complex.

Why Hiring a Michigan Bankruptcy Attorney Can Save You Money

Although not required, hiring an experienced Michigan bankruptcy attorney can increase your chance of success and reduce costly mistakes. A knowledgeable attorney can guide you through the paperwork, represent you in court, and help protect your assets, making the initial attorney fee a wise investment in the long term.

Get Legal Help from a Michigan Bankruptcy Lawyer

Filing for bankruptcy in Michigan comes with costs, but understanding these expenses can help you plan more effectively. Whether you are pursuing Chapter 7 or Chapter 13, seeking help from an experienced Michigan bankruptcy attorney can make the process smoother.

If you are struggling with debt and considering bankruptcy, contact Kostopoulos Bankruptcy Law today to explore your options. You can set up a free no-obligation consultation by calling 877-969-7482.

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FAQs About The Costs Involved with Bankruptcy in MIchigan

Can I file for bankruptcy myself in Michigan?

Yes, you can file for bankruptcy yourself in Michigan, a process called “pro se” filing. However, it’s often recommended to hire an attorney to ensure your case is handled properly and to avoid costly mistakes.

How long does a bankruptcy take in Michigan?

In Michigan, a Chapter 7 bankruptcy typically takes 3 to 4 months to complete. Chapter 13 bankruptcy can last 3 to 5 years, depending on your repayment plan.

Can I keep my car if I file bankruptcy in Michigan?

Yes, you may keep your car if you file for bankruptcy in Michigan, as long as you continue making payments and the car’s equity falls within Michigan’s exemption limits.

Is it cheaper to file Chapter 7 or 13?

It is generally cheaper to file Chapter 7 bankruptcy, as attorney fees typically range from $1,200 to $2,000, whereas Chapter 13 fees can be between $3,000 and $5,000.