What Are Chapter 13 Debt Limits in Michigan?

Chapter 13 bankruptcy is an option to tackle crushing debt, but eligibility is a top factor. To qualify, filers will need to ask a crucial question: What are Chapter 13 debt limits in Michigan?

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FAQs About Michigan Chapter 13 Debt Limits

How Does Chapter 13 Work in Michigan?
Chapter 13 bankruptcy in Michigan allows individuals with regular income to create a repayment plan to pay off their debts over a period of 3 to 5 years. It helps protect assets from liquidation and provides a structured way to manage debts while keeping creditors at bay.
What Happens if You Incur Debt During Chapter 13?
If you incur debt during a Chapter 13 case in Michigan, you must notify the court and trustee. The new debt may be included in your repayment plan, but it could affect your monthly payment or require an amendment to your plan.
What Is the Debt Limit for Chapter 13?
In Michigan, the debt limits for Chapter 13 are $1,257,850 for secured debts and $419,275 for unsecured debts. If your debts exceed this amount, you may need to consider other bankruptcy options, such as Chapter 11.
How Much of My Debt Do I Have to Pay in Chapter 13?
In Chapter 13 bankruptcy in Michigan, the amount of debt you must pay depends on your disposable income, the type of debt, and your ability to repay. Typically, you will repay as much as you can afford considering allowable living expenses. Unsecured creditors may receive a reduced portion of what is owed.
What Is the Highest Chapter 13 Payment?
There is no set "highest" Chapter 13 payment, as payments depend on the debtor’s income, expenses, and the total amount of debt. The monthly payment is structured to fit the debtor's ability to repay while covering secured and unsecured debt. The court will adjust the plan based on financial circumstances.
Can You Make Too Much Money for Chapter 13?
While there is no income cap for Chapter 13, high earners may not qualify if their debts exceed the eligibility limits. In Michigan, Chapter 13 is available to those with less than $2.75 million in combined secured and unsecured debts. High income may also affect the payment plan and debt repayment terms.
What Are Other Eligibility Factors for Chapter 13?
Aside from having regular income and falling under the debt limit, filers must be individuals or married spouses. You must go through credit counseling within 180 days before filing your Chapter 13 petition, and you must wait at least 2 years or more after a previous bankruptcy case.

What Are the Common Mistakes to Avoid When Filing for Bankruptcy in California?

Filing for bankruptcy is a significant financial decision, and making mistakes in the process can have serious consequences. So, what are the common mistakes to avoid when filing for bankruptcy in California?

The most common mistakes include transferring assets before filing, taking on new debt, cashing out retirement funds, failing to disclose financial details, and waiting too long to file. Avoiding these missteps can protect your case and maximize your financial relief.

With decades of experience guiding Californians through bankruptcy, I’ve helped countless individuals successfully resolve their debts while protecting their assets. Let’s explore the most critical mistakes you should avoid when filing for bankruptcy in California.

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The Value of Restructuring Support Agreements in Chapter 11 Cases

When a company files for Chapter 11 bankruptcy, restructuring support agreements (RSAs) can play a crucial role in shaping the outcome. What is the value of restructuring support agreements in Chapter 11 cases?

RSAs provide a structured roadmap for debt restructuring, increasing creditor confidence, reducing disputes, and expediting the bankruptcy process. By securing creditor commitments early, RSAs help streamline negotiations, minimize litigation risks, and improve the chances of a successful reorganization.

With decades of experience in bankruptcy law, I’ve seen how RSAs can significantly impact Chapter 11 cases. Let’s explore how they work and why they are a valuable tool for debtors and creditors alike.

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What Disqualifies You From Filing Chapter 7 in Michigan?

If you’re struggling with debt, Chapter 7 bankruptcy might seem like a viable solution. But what disqualifies you from filing Chapter 7 in Michigan?

You may be disqualified from Chapter 7 if your disposable income is high enough to repay debts through a Chapter 13 repayment plan. Other disqualifying factors include:

  • Failing the Means Test: If your income exceeds Michigan’s median income and you have enough disposable income to repay debts.
  • Previous Bankruptcy Filings: If you received a Chapter 7 discharge within the last eight years or a Chapter 13 discharge within six years.
  • Fraudulent Activity: If you attempted to hide assets, committed bankruptcy fraud, or misrepresented financial information.
  • Failure to Complete Credit Counseling: You must complete a court-approved credit counseling course before filing.

With decades of experience helping Michigan residents navigate bankruptcy, I’ve assisted countless individuals in determining their eligibility. Let’s break down these disqualifications in detail to help you understand your options.

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FAQs About Chapter 7 Bankruptcy in Michigan

Can I qualify for Chapter 7 if my income is above the limit?
Yes, if you pass the means test, you may still qualify despite having higher income.
What happens if I miss the credit counseling deadline?
Your case may be dismissed, and you’ll need to restart the process after completing counseling.
How does Chapter 13 differ from Chapter 7?
Chapter 13 involves repaying debts over time, while Chapter 7 eliminates most debts through liquidation.
Can I keep my house in Chapter 7 bankruptcy?
If your home equity is within Michigan’s homestead exemption, you can usually keep your house.
What happens if I’m accused of fraud during bankruptcy?
Your case may be dismissed, and you could face fines or criminal charges.
What is non-exempt property in bankruptcy?
Non-exempt property includes assets like high-value vehicles, vacation homes, or luxury items not covered by exemptions.
How long does the Chapter 7 process take?
Most cases are resolved within four to six months.

Can Chapter 13 Stop Foreclosure in California?

If you’re facing foreclosure, you may be wondering: Can Chapter 13 bankruptcy stop foreclosure in California?

Yes, Chapter 13 bankruptcy can stop foreclosure in California. The automatic stay immediately halts foreclosure proceedings, and the structured repayment plan allows homeowners to catch up on missed mortgage payments over three to five years.

With decades of experience helping Californians protect their homes from foreclosure, I’ve assisted countless homeowners in using Chapter 13 to regain financial stability. Let’s explore how this process works and what you need to know to safeguard your home.

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What to Expect After Filing Chapter 7 Bankruptcy in California

If you’re considering bankruptcy, you may be wondering: What happens after filing Chapter 7 bankruptcy in California?

After filing Chapter 7 bankruptcy in California, an automatic stay immediately halts all creditor collection efforts, including wage garnishments, foreclosures, and lawsuits. The court will notify creditors of your case, and you’ll be required to attend a 341 Meeting of Creditors before your eligible debts can be discharged.

With decades of experience helping individuals navigate bankruptcy, I’ve guided countless Californians through the Chapter 7 process to achieve financial relief. Let’s break down what you can expect after filing and how to prepare for the next steps.

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How Much Does it Cost to File Bankruptcy in California?

If you’re considering bankruptcy, one of your biggest concerns might be the cost. You may be wondering: How much does it cost to file bankruptcy in California?

As of 2025, the court filing fees for bankruptcy in California are:

  • $338 for Chapter 7
  • $313 for Chapter 13

Beyond court fees, attorney costs can range from $1,000 to $5,000, depending on the complexity of your case. Other expenses may include credit counseling courses and miscellaneous administrative fees.

With decades of experience assisting Californians through the bankruptcy process, I’ve helped countless individuals understand the financial aspects of filing. Let’s explore the full cost breakdown and what to expect when filing for bankruptcy in California.

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Are There Any Exemptions for Specific Assets in California Bankruptcy Cases?

If you’re considering bankruptcy in California, you might be wondering: Are there any exemptions for specific assets in California bankruptcy cases?

Yes, California offers specific asset exemptions under two exemption systems: Section 704 and Section 703. The 704 system provides stronger protections for home equity, while the 703 system offers flexibility for personal assets. Exemptions cover vehicles, jewelry, household goods, retirement accounts, and more, ensuring you can retain essential property during bankruptcy.

Having helped countless individuals protect their most valuable assets in bankruptcy, I know how important it is to choose the right exemption strategy. Let’s break down the key asset protections available under California law.

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How Can I Protect My Assets When Filing for Bankruptcy in California?

Filing for bankruptcy can be a difficult decision, especially when you’re concerned about losing your assets. How can you protect your assets when filing for bankruptcy in California?

In California, you can protect your assets by using the state’s bankruptcy exemptions, which shield essential property like home equity, vehicles, retirement accounts, and personal belongings. Choosing the right exemption system—either the 703 or 704 set—can help maximize protection and allow you to keep critical assets while discharging eligible debts.

With decades of experience helping clients secure their financial future, I understand the strategies that can help preserve your property during bankruptcy. Let’s explore the best ways to safeguard your assets under California law.

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What Are the Differences Between Chapter 7 vs. Chapter 13 in Michigan?

If you’re considering bankruptcy, choosing between Chapter 7 and Chapter 13 is a critical decision. You might be wondering: What are the differences between Chapter 7 vs. Chapter 13 in Michigan?

The biggest difference is that Chapter 7 eliminates unsecured debts through liquidation, while Chapter 13 allows you to reorganize your debts into a structured repayment plan.

  • Chapter 7: Discharges unsecured debts (credit cards, medical bills, personal loans) but may require selling non-exempt assets.
  • Chapter 13: Lets you keep your property while making structured payments over 3–5 years to catch up on secured debts like a mortgage or car loan.

With decades of experience assisting Michigan residents through bankruptcy, I’ve helped countless individuals determine which option best suits their financial situation. Let’s break down the key differences and eligibility requirements for both Chapter 7 and Chapter 13 in Michigan.

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FAQs About Chapter 7 vs. Chapter 13 in Michigan

What is the main difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 eliminates unsecured debt by liquidating non-exempt assets, while Chapter 13 reorganizes debts into a repayment plan and allows you to keep your assets.
Which bankruptcy chapter is faster to complete?
Chapter 7 is quicker, generally taking 4–6 months to complete, whereas Chapter 13 extends over a period of 3–5 years.
Can Chapter 13 bankruptcy stop foreclosure?
Yes. Chapter 13 allows you to catch up on mortgage payments and prevent foreclosure through a repayment plan.
Do I need regular income to file for Chapter 7?
No. Chapter 7 does not require regular income but does require passing the means test.
Can I discharge taxes through Chapter 13?
Yes. Chapter 13 can help discharge certain taxes that are not eliminated in Chapter 7.
What happens to secured debts in Chapter 7 vs. Chapter 13?
In Chapter 7, you must stay current on secured debts to keep property, while Chapter 13 lets you catch up on arrears over time.
How can an attorney help me choose the right bankruptcy chapter?
An attorney evaluates your financial situation, explains the benefits of each chapter, and ensures you meet eligibility requirements.

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