How Often Can You File Bankruptcy?

Filing for bankruptcy can give you the fresh start you need—but what if you’ve filed before and find yourself in financial trouble again? How often can you file bankruptcy?

You can file bankruptcy multiple times, but you must wait a specific number of years between discharges depending on the type of bankruptcy filed previously and the type you plan to file next.

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FAQs About Filing Bankruptcy Again

Can I file bankruptcy more than twice?
Yes. There’s no limit to how many times you can file—only limits on how often you can receive a discharge.
Can I file Chapter 13 right after Chapter 7?
Yes, however, you must wait 4 years from the filing date of your Chapter 7 case before you can obtain a discharge in Chapter 13.
What if I filed Chapter 13 but didn’t complete the plan?
You may still be able to file again, but whether you’re eligible for a discharge depends on why the case was dismissed.
Can I refile bankruptcy if my last case was dismissed?
Yes. You can usually refile, but if your case was dismissed with prejudice, you may have to wait or seek court approval.
Will multiple bankruptcies affect my credit forever?
No. Chapter 7 stays on your credit for 10 years and Chapter 13 for 7 years. After that, they no longer affect your credit report.

Who Pays for Bankruptcies in Michigan?

The US Bankruptcy Code is a set of complex laws covering discharge of debt, the role of the bankruptcy trustee, administration of the case, and rights of filers. It’s confusing to grasp how costs work, so you might wonder: Who pays for bankruptcies in Michigan?

In Michigan, the person filing for bankruptcy is responsible for court fees, credit counseling, and attorney costs. In Chapter 13, payments are made through a repayment plan, while Chapter 7 requires upfront costs. Some filers may qualify for fee waivers or payment plans.

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Answers to FAQs About Who Pays for Bankruptcies in Michigan

What is the average monthly payment for Chapter 13?
The average monthly payment for a Chapter 13 bankruptcy plan in Michigan varies based on income, debts, and expenses. Generally, payments range from $300 to $1,000 per month, but they can be higher for those with significant secured debts, such as a mortgage or car loan. The payment amount is calculated based on disposable income, priority debts, and secured debt obligations. The court must approve the plan, so that creditors receive fair repayment over three to five years.
What disqualifies you from filing bankruptcies?
Several factors can disqualify someone from filing for bankruptcy in Michigan. For Chapter 7, failing the means test—which measures income against state median levels—can make someone ineligible. For Chapter 13, having too much secured or unsecured debt can prevent filing.

Additionally, previous bankruptcy filings within certain timeframes may disqualify an applicant. Fraud, such as hiding assets or submitting false information, can also result in a case being dismissed or denied.
What income is too high for Chapter 7?
Income eligibility for Chapter 7 bankruptcy in Michigan is determined by the means test, which compares household income to the state median. As of 2024, the income limit for a single filer is approximately $64,000, but it increases with household size. If income exceeds the limit, filers may still qualify by deducting allowable expenses. Those who do not pass the means test may need to consider Chapter 13 instead, which involves a structured repayment plan.
Do taxpayers pay for personal bankruptcies?
No, taxpayers do not directly pay for personal bankruptcies in Michigan or anywhere in the U.S. The bankruptcy system is funded through court filing fees, attorney fees, and payments made by debtors. Trustees, who are tasked with managing bankruptcy cases, are compensated from these fees. While some costs are absorbed by creditors in the form of unpaid debts, the general public does not bear the financial burden of individual bankruptcy filings.

How to File Bankruptcy and Keep Your Car​​ in Michigan

When you rely on your vehicle for employment, family, and personal reasons, it’s hard to imagine the extensive consequences if you lose it in bankruptcy. To avoid or mitigate the harsh consequences, you need to know how to file bankruptcy and keep your car​​ in Michigan.

To file bankruptcy and keep your car in Michigan, you must use exemptions to protect its equity. In Chapter 7, stay within exemption limits or reaffirm the loan. In Chapter 13, include payments in a repayment plan. Choosing the right bankruptcy type ensures you can keep your vehicle.

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FAQs About Filing Bankruptcy and Keeping Your Car in Michigan

Can I declare bankruptcy and keep my car?
Yes, you can file for bankruptcy and keep your car in Michigan under certain conditions. If you file for Chapter 7, your car’s equity must fall within the Michigan or federal motor vehicle exemption limits, and you must stay current on payments if you have a loan. In Chapter 13, you can include missed car payments in a repayment plan to prevent repossession. Reaffirming the loan or redeeming the vehicle may also allow you to keep it.
What assets are exempt from Chapter 7 in Michigan?
In a Michigan Chapter 7 bankruptcy, certain assets are protected from liquidation under exemption laws. Exempt assets include up to $4,250 in equity for a vehicle ($9,525 for elderly or disabled individuals), homestead equity up to $46,125, personal property, tools of the trade, retirement accounts, and some wages. Federal exemptions are also an option, offering different limits. Choosing the right exemption set is crucial to protecting property, including your car, from being sold by the bankruptcy trustee.
What are the risks of keeping my car during bankruptcy?
The biggest risk of keeping a car during bankruptcy is repossession if payments are not current. In Chapter 7, if the car's equity exceeds exemption limits or the filer cannot afford loan payments, the lender or trustee may take the vehicle. In Chapter 13, failing to make plan payments can result in repossession. Additionally, reaffirming a car loan in Chapter 7 means personal liability for the debt remains, even if financial struggles continue.
Is it worth it to fight to keep my car in bankruptcy?
Yes, keeping a car in bankruptcy is often worth the effort if it is necessary for work, family obligations, or daily transportation. If the car loan is affordable and its equity falls within exemption limits, retaining the vehicle can provide long-term stability. However, if payments are unaffordable, surrendering the car and discharging the debt may be a better financial decision. Evaluating your overall debt situation and repayment ability is essential before deciding.

Can You Go to Jail for Not Paying a Judgment?

If you’ve been sued and lost the case, a court judgment may now require you to pay a debt. But what happens if you can’t afford to pay? Can you go to jail for not paying a judgment?

No, you cannot go to jail simply for failing to pay a civil judgment. However, you can face serious legal and financial consequences—especially if you ignore court orders or fail to appear in court related to the debt.

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FAQs About Unpaid Debt Penalties

Can a creditor put you in jail for not paying?
No. Private creditors cannot jail you. Only failure to follow court orders may result in jail.
Can I go to jail for not paying a medical bill?
No. Medical debt is civil, not criminal. You may face a judgment, but not jail.
Can a judgment be removed through bankruptcy?
Yes. Bankruptcy may discharge the debt and, in some cases, eliminate the judgment lien.
What should I do if I receive a court summons related to a debt?
Do not ignore it. Show up in court or consult an attorney immediately to avoid default judgments or arrest.
How long can a judgment stay on your record?
In most states, 7 to 10 years. Some can be renewed for longer periods.

How Long Can a Chapter 7 Trustee Keep a Bankruptcy Case Open?

Filing for Chapter 7 bankruptcy provides powerful debt relief—but the timeline isn’t always quick. So how long can a Chapter 7 trustee keep a case open?

A Chapter 7 trustee can keep a case open for several months to multiple years, depending on whether there are non-exempt assets to administer or legal issues to resolve. Most no-asset cases close within 4–6 months, while asset cases may remain open for 1–3 years or more.

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Frequently Asked Questions

Can a Chapter 7 case stay open after discharge?
Yes. A case may remain open while the trustee administers assets, even after your debts are discharged.

While a general discharge is typically granted, it may be contested if creditors assert that specific debts are not dischargeable.
Creditor Objections
In a Chapter 7 bankruptcy case, creditors have the right to object to the discharge of a particular debt if they believe it was incurred through fraud or other wrongful conduct. To do so, the creditor must file a complaint with the bankruptcy court, initiating what is known as an adversary proceeding.

The creditor must then prove to the court that the debt should not be discharged. If the court finds in favor of the creditor, the debt will remain the debtor’s responsibility. This process ensures that the bankruptcy system is not abused and that creditors have a fair opportunity to challenge the discharge of debts they believe were incurred improperly.
Can I reopen a Chapter 7 case after it closes?
In some cases. A case may be reopened for issues like fraud, mistakes, or undisclosed assets.

Under certain circumstances, a bankruptcy discharge can be denied or revoked, such as in cases of fraud or failure to disclose assets.
Does the trustee notify me when the case closes?
Yes. You’ll receive a notice from the court and trustee once the final decree is entered.

The successful completion of the bankruptcy process leads to a discharge order, signifying the elimination of certain debts after fulfilling all requirements set by the Bankruptcy Code.
Can I sell property during an open Chapter 7 case?
Not without court approval. Any sale of non-exempt assets must go through the trustee.

The trustee may need to sell a piece of real property owned by an individual during the legal process. This involves several steps, such as valuing the asset, listing it with a realtor, and addressing potential delays due to court authorization and creditor claims settlement.
What if my case has been open for over a year?
It may be an asset case. Trustees can keep cases open for years while liquidating assets and resolving claims.

Nonexempt property must be relinquished to a trustee for liquidation to pay off creditors.

How Much Does Chapter 13 Bankruptcy Cost in Michigan?

Because you’re already facing financial challenges when considering bankruptcy, it’s understandable that you’ll have concerns about expenses. Many filers ask the question: How much does Chapter 13 bankruptcy cost in Michigan?

Filing for Chapter 13 bankruptcy in Michigan costs $313 in court fees. Additional expenses include credit counseling fees, typically $20-$50, and attorney fees, which average between $3,000 and $4,500. These costs vary based on case complexity and attorney experience.

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FAQs About Chapter 13 Bankruptcy Costs in Michigan

How much does it cost to file for Chapter 13 bankruptcy in Michigan?
Filing for Chapter 13 bankruptcy in Michigan involves a court filing fee of $313. This fee is required at the time of filing the bankruptcy petition. In some cases, the court may allow the fee to be paid in installments. Additionally, there are costs for mandatory credit counseling and attorney fees, which can vary based on the complexity of the case and the attorney's experience. It's important to budget for these expenses when considering Chapter 13 bankruptcy.
How much debt is needed to file Chapter 13?
There is no minimum debt requirement to file for Chapter 13 bankruptcy in Michigan. However, there are maximum debt limits. As of 2023, unsecured debts must be less than $465,275, and secured debts must be less than $1,395,875. These limits are adjusted periodically. Chapter 13 is designed for individuals with a regular income who can afford to make monthly payments, so the decision to file should be based on the ability to adhere to a repayment plan rather than a specific debt amount.
How long does it take for Chapter 13 to be approved?
The approval process for Chapter 13 bankruptcy in Michigan typically takes between 30 to 60 days after filing. This period includes the time needed for the court to review the proposed repayment plan and for creditors to raise any objections. Once the plan is confirmed by the court, the debtor begins making payments according to the plan's terms. The entire Chapter 13 process, from filing to discharge, usually spans three to five years, depending on the repayment plan's duration.
What is the downside to filing Chapter 13?
One downside to filing Chapter 13 bankruptcy in Michigan is the impact on your credit report, as it remains for seven years. Additionally, the repayment plan requires a long-term commitment, typically lasting three to five years, during which the debtor must adhere to strict budgetary constraints. Failure to make payments can result in the dismissal of the case. Furthermore, while Chapter 13 allows for debt reorganization, it does not eliminate all debts, such as certain taxes and student loans, which must still be paid.

Can Personal Loans Be Relieved in a Michigan Bankruptcy?

The bankruptcy process aims to discharge certain types of debts, so there’s one common question for may debtors: Can personal loans be relieved in a Michigan bankruptcy?

Yes, personal loans can be relieved in a Michigan bankruptcy if they are unsecured. Chapter 7 bankruptcy often discharges personal loans entirely, while Chapter 13 allows repayment over time, with remaining balances potentially discharged. Legal guidance ensures the best outcome.

As a Michigan bankruptcy lawyer with an extensive background in bankruptcy law, I’ve advocated for many debtors seeking to understand how personal loans work in Chapter 7 and Chapter 13. Here, I’ll cover discharge of unsecured debts, what cannot be eliminated, and the steps in a bankruptcy case.

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FAQs About Personal Loans and Bankruptcy in Michigan

Can a personal loan be written off in bankruptcy?
Yes, personal loans can often be written off in bankruptcy if they are unsecured. In Michigan, Chapter 7 bankruptcy typically discharges personal loans entirely, provided they meet the eligibility criteria. Under Chapter 13, these loans may be included in a repayment plan, with any remaining balance potentially discharged after the plan's completion. However, personal loans tied to fraudulent activity may not qualify for discharge.
How Do I File a Bankruptcy Case?
Filing for bankruptcy in Michigan involves several steps. The process begins with credit counseling from an approved agency. Next, individuals complete detailed financial documentation, including income, assets, debts, and expenses. Filing the bankruptcy petition with the court initiates the case.

Michigan residents must also attend a meeting of creditors, where the trustee reviews the case. Accurate preparation and adherence to legal requirements are critical for a successful outcome.
Does Michigan have a debt relief program?
Michigan does not have a state-specific debt relief program, but residents can access various federal programs and bankruptcy options. Chapter 7 and Chapter 13 bankruptcy are common choices for debt relief in Michigan.

Additionally, nonprofits and credit counseling agencies offer programs to negotiate with creditors, consolidate debt, or create manageable repayment plans. These alternatives provide Michigan residents with pathways to regain financial stability while addressing their unique circumstances.
What loans are not forgiven in bankruptcy?
Certain loans and debts are not forgiven in bankruptcy. In Michigan, debts such as student loans, child support, alimony, and certain tax debts typically cannot be discharged. Secured debts, like car loans or mortgages, may require surrendering the collateral if payments are not made. Loans obtained through fraudulent means are also excluded from discharge.

Understanding which obligations remain after bankruptcy helps individuals make informed decisions about their financial recovery.
Is it better to settle debt or bankruptcy?
The choice between settling debt and filing for bankruptcy depends on individual circumstances. Debt settlement can reduce the total amount owed but may still harm credit scores and incur fees. A creditor might require a lump sum payment that many debtors cannot afford. Bankruptcy offers broader relief by discharging eligible debts but has a longer-lasting credit impact.

In Michigan, individuals with overwhelming debts or multiple creditors often find bankruptcy to be a more comprehensive solution than settling or another debt management plan. Consulting a bankruptcy attorney helps determine the best path forward.

What is Cramdown in Chapter 13 Bankruptcy in Michigan?

Terminology in the legal world can sometimes seem odd, and a Chapter 13 bankruptcy cram down certainly qualifies. So, what is cramdown in Chapter 13 bankruptcy in Michigan?

In a Michigan Chapter 13 bankruptcy, a “cramdown” allows you to reduce the balance of a secured debt (like a car loan or investment property mortgage) to the current value of the collateral, potentially leading to lower payments and interest rates. 

Having practiced as a Michigan Chapter 13 bankruptcy attorney for over two decades, I’ve worked on countless cases to leverage cram down for the benefit of clients. In this article, I’ll review what cramdown means, the impact on secured loans, and the steps in the bankruptcy process.

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FAQs About Cramdown in Chapter 13 Bankruptcy

What is a Chapter 13 cramdown?
A Chapter 13 cramdown is a legal process that allows debtors to reduce the amount owed on certain secured debts to the current market value of the collateral. For example, if you owe more on a car loan than the car is worth, the loan balance can be reduced to match the vehicle's value.

The remaining unsecured portion of the debt may be discharged at the end of the repayment plan. This process is available only under specific conditions and applies to depreciated assets.
What is the cram down rule in bankruptcy?
The cram down rule in bankruptcy permits debtors to adjust the terms of secured debts under a court-approved repayment plan. This typically involves reducing the loan balance to the value of the collateral, lowering the interest rate, or extending repayment terms.

The rule primarily applies in Chapter 13 bankruptcy cases and helps individuals manage debts tied to depreciating assets. Certain exceptions, such as loans on primary residences, limit its application.
What is the 910 day rule for cramdowns?
The 910-day rule prevents car loan cramdown for vehicles purchased within 910 days (approximately two and a half years) of filing for bankruptcy. Under this rule, the debtor must pay the full balance of the loan through their Chapter 13 repayment plan, regardless of the car’s current market value. This rule was established to protect lenders from significant losses on newer loans and leads to fair treatment in bankruptcy cases.
What is the difference between cram up and cram down?
A "cram down" reduces the amount owed on secured debts to the collateral’s value, benefiting debtors by lowering their financial obligations. Conversely, a "cram up" involves debtors restructuring payment terms to pay the full debt balance, often at more favorable terms such as reduced interest rates.

While cramdowns are more common, cram ups may be used when debtors seek to retain assets without reducing the principal owed. Both processes require court approval under bankruptcy law.
What liens can be crammed down in Chapter 13?
In Chapter 13 bankruptcy, certain liens on secured debts can be crammed down, meaning the loan balance is reduced to the collateral’s current market value. Examples include vehicle loans (if the car was purchased over 910 days before filing), rental property mortgages, and loans secured by furniture or equipment.

However, primary residence mortgages cannot typically be crammed down. The remaining unsecured portion of the debt may be discharged after completing the repayment plan, providing significant financial relief to debtors with depreciated assets.

Can I File Bankruptcy While in the Military?

If you’re serving in the armed forces and facing financial difficulties, you may be wondering: Can I file for bankruptcy while in the military?

Yes, military personnel can file for bankruptcy just like civilians. However, service members should consider unique factors such as potential impacts on security clearances and military career standing before proceeding.

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What Happens When a Married Couple Files for Bankruptcy in California?

If you and your spouse are struggling with debt, you may be wondering: What happens when a married couple files for bankruptcy in California?

When a married couple in California files for bankruptcy, all community property—assets and debts acquired during the marriage—becomes part of the bankruptcy estate. In most cases, eligible debts are discharged, offering financial relief.

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