Michigan Chapter 13 Bankruptcy Income Guidelines (2025): Do I Qualify?

Taking Back Control — One Step at a Time

Filing for Chapter 13 bankruptcy in Michigan isn’t about walking away — it’s about moving forward with a plan that gives you and your family a real path to a stronger financial future. One of the biggest questions people have is:  Do I even qualify?

One of the main factors is your household income. Knowing where you stand will help you feel empowered and ready to tackle your debt. Below is a simple breakdown of the 2025 Michigan Chapter 13 bankruptcy income guidelines, how the Means Test works, and what to expect if you’re above or below these numbers.

We are here to help guide you! Our attorneys share over 120 years of combined legal experience in the bankruptcy and debt resolution space. You can trust our team to help you make the best choices for your finances and future. Call us today at 866-261-8282 for a free, confidential consultation or fill out the form below and we’ll be right in touch with you. 

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Why Do Income Guidelines Matter?

Your income, compared to Michigan’s median income, decides whether your Chapter 13 repayment plan will last three years or five. It also helps figure out how much you’ll need to pay to your creditors while you’re in the plan. Most often our clients are only required to pay back a fraction of what they owe to their unsecured creditors — this is called a percentage plan.

This is where the Means Test comes in — it’s basically a tool the court uses to make sure your plan is fair and doable for you.

2025 Michigan Chapter 13 Bankruptcy Income Guidelines

So, what do the numbers look like this year? Here’s a quick snapshot for 2025:

If your household income is below the guideline for your family size, your plan might last three years. If it’s above, you’ll likely have a five-year plan instead. When you call in, one of our experienced Chapter 13 attorneys will review your income and finances, guide you through the next steps of filing a Chapter 13 plan, and answer any questions you may have.

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How Does the Means Test Affect Whether I Qualify?

The Means Test looks at all of your household income — not just your paycheck. This can include your spouse’s income, bonuses, disability, Social Security, child support, or other sources of money.

It also considers some of your living expenses, like your mortgage, car payments, child care, or out-of-pocket medical costs.

Many people think they won’t qualify for a shorter plan at first glance — but once we help them run the real numbers, they’re surprised to find they do. Our firm specializes in Chapter 13 bankruptcy and can guide you through the Means Test to determine how it may affect your plan.

What If I’m Over the Income Guidelines?

It’s easy to panic if you see your income is above the guideline — but don’t! You can absolutely still file for Chapter 13. It just means your plan will probably run five years instead of three.

In fact, a longer plan can be a good thing. It gives you more time to catch up on debts, protect your home or car, and pay what you can afford without feeling squeezed.

What If My Income Changes While I’m in a Plan?

Life changes — and so can your income. Raises, job changes, bonuses, or unexpected setbacks can all affect what you make while you’re in your plan.

If that happens, don’t worry — you’re not stuck. We can help you adjust your plan so you stay on track and in good standing with the court. Because filing a Chapter 13 bankruptcy in Michigan is customized to your exact circumstances, it provides flexibility for your changing needs throughout the repayment plan.

What Counts as Income for a Chapter 13 Bankruptcy Plan?

Your income includes wages, overtime, tips, commissions, bonuses, Social Security, child or spousal support, rental income, unemployment or disability benefits, and sometimes your income tax returns.

If you’re not certain how things factor into the plan, don’t stress. That’s what we’re here for — we’ll help you figure it out and make sure you’re comfortable with the whole plan before we file anything.

What If My Household Size Changes?

Household size also matters for these income guidelines. If you get married, have a baby, or someone moves in or out, that can change how the guidelines apply to you.

Life happens — just keep us updated so we can help you modify your plan as needed.

Chapter 13 Repayment Plan vs. Chapter 7 Fresh Start — Which Do I Qualify For?

Factors that come into play when you’re deciding which option is best for you include:

• Income
• Assets and home equity
• Nature of your debt (unsecured vs. secured debts like a mortgage or car loan)
• Any pending creditor actions, like home foreclosure, car repossession, or wage garnishment
• Long-term financial goals (for example, what assets you want to keep vs. what you may want to surrender to eliminate future debt obligations)

It’s common to feel confused about your options — that’s where we come in. During your free consultation, we’ll walk you through every option, explain the benefits of both, figure out what you qualify for, and make sure you feel confident in your decision.

How Could Filing a Chapter 13 in Michigan Benefit Me?

Chapter 13 bankruptcy is a powerful, personalized repayment plan with many benefits and protections. By filing a Chapter 13 you could:

• Stop a home foreclosure or tax forfeiture if filed at the right time (0% interest on arrearages, no continued late penalties or fees)
• Get your vehicle back if it’s been repossessed or prevent repossession if you’re behind on payments
• Set up reasonable repayment terms with the IRS for back taxes
• Prioritize debt repayment and potentially reduce what you owe to unsecured creditors based on your budget
• Receive court protection from your creditors while you complete your plan
• Improve your credit by reducing your debt-to-income ratio, stopping “late reports,” and building a positive track record through plan payments

You’re Not Alone — Let’s Figure This Out Together

Figuring out whether you qualify for Chapter 13 bankruptcy can feel overwhelming — but you don’t have to do it alone. Our Michigan bankruptcy attorneys have helped thousands of families get out of debt, protect what matters most, and start fresh.

Schedule your free consultation with a Michigan Chapter 13 bankruptcy lawyer today. We’re ready to help you take the next step forward — with honest answers, clear guidance, and the experienced support you deserve.