Due to some changes that took place this year, some people who didn't previously qualify for chapter 7 bankruptcy in Michigan may now be eligible. The median income went up in Michigan on April 1, 2013. Then on May 1, 2013 the National Standards for living expenses also changed.
How to Determine Your Eligibility
If your yearly household income is less than the median income for your family size according to the Means Test you should be able to file for Chapter 7 bankruptcy. You won't have to fill out the expenses portion of the Means Test, although you may want to. The judge could still rule that you are abusing the system, depending on your exact situation.
If your income is above the average you will have to fill out the expenses portion. This portion looks at your housing expenses, living expenses, out-of-pocket healthcare and transportation expenses. These expenses vary by county and by number of people in your household.
Filling out the expenses portion shows if you have money left over each month, which you could use to pay back unsecured creditors in a five-year Chapter 13 bankruptcy plan. If you do have money left over at the end of each month, you will probably have to file Chapter 13 bankruptcy. It's important to note that some judges use different forms than those on this Means Test.
There are some cases where you may not currently be eligible to file chapter 7, but could become eligible. If your income has gone down suddenly within the last six months and has not increased, retake the Means Test after the first of the month. As long as your income remains below the average you could qualify.
Getting a Post-Bankruptcy Auto Loan
If you have filed for chapter 7 bankruptcy, and you need a car, you can get a post-bankruptcy auto loan as soon as the bankruptcy is discharged. The discharge process is fairly quick with chapter 7, which means that you could be driving a new-to-you can in a matter of months. You'll also be on the road to rebuilding your credit.
Remember, we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.