What Is the Chapter 13 Bankruptcy Process in Michigan?

The Chapter 13 process and time-line is greatly variable as compared to the Chapter 7. Like a Chapter 7, the process begins by providing a large amount of documentation to the filing debtor’s attorney and the taking of the first of two credit counseling courses. 

With that documentation, the debtor’s attorney drafts, in a Chapter 13, not just a petition but also the Chapter 13 Plan.

 The Chapter 13 Plan be a 36-month Plan up to a 60-month Plan. Although there is no Means Test-based eligibility standard in a Chapter 13, the Means Test still plays a role: if the filing debtor “passes” the Means Test, that individual is allowed to propose a 36-month plan. If that filing debtor “fails” the Means Test—that is, has income higher for his or her household size than the state median—that individual must propose a 60-month Plan.

 Therefore, the Chapter 13 as a whole may be 36-to-60 months long. However, the approval process for the Chapter 13 Plan, achieving what is known as “confirmation” of the Plan, is roughly equivalent to the entire length of the Chapter 7.

As in a Chapter 7, a 341 Meeting of Creditors occurs 20-40 days after the filing of the petition. The Chapter 13 341 can be slightly longer than a Chapter 7 341, as long as thirty or forty minutes in some cases, and it generally involves answering a series of questions posed by the Trustee that roughly will frame the Objections to Confirmation that, at least here in the Eastern District of Michigan, they inevitably file between the 341 Meeting and the second hearing that the filing debtor must attend: the Confirmation Hearing.

The Confirmation Hearing occurs 4-6 weeks after the 341 Meeting, and it is a sort of pow-wow between the debtor’s attorney and the Trustee’s attorneys, as well as the attorneys of any creditors who have filed objections to the confirmation of the debtor’s Plan. All of the parties negotiate resolutions to any objections outstanding by this time, and, if successful, the Plan is agreed to be confirmed and the debtor’s attorney may file an Order Confirming the Plan with the Bankruptcy Court to be signed by the judge.

Once confirmed, the Plan is off and running, the only obligation being the monthly payment by the debtor into the Plan.

If you are a Michigan resident and are interested in filing for either a Chapter 7 or a Chapter 13  bankruptcy, please contact me to schedule a free, initial consultation at jhilla@aronofflinnell.com or (248) 977-4182.