Legal Question in Credit and Debt Law in Michigan

First off, unless you want to keep the home a bankruptcy is probably not in your best interest with limited exceptions. A Chapter 13 (court ordered payment plan) could be used if you have the means to catch up the payments and make the current mortgage payment. It is a complicated process so I would need a lot more information to see if you could afford that to begin with. If you are just worried about a deficiency then there are two ways to deal with that. First, what was or is the amount bid at the sheriff's sale? If they bid $122,000 (paper bid) and that is the amount they said you owed in the advertisement (notice of foreclosure published in legal news) then your deficiency is zero and bankruptcy should not be an option absent other significant debts. If they bid $50,000.00 at the sale then they could sue you for the difference between $122,000 and $50,000.00. You do have a defense to that and that is if you have evidence that the property was worth more than $50,000.00. So if you are worried about this, I suggest paying for an appraisal to be conducted at around the time of the sheriff's sale or as soon as possible after. You can avoid paying a deficiency by filing a bankruptcy however, make sure you actually need to file bankruptcy first.

The above answer is correct, but if the home is indeed worth only $50k, the options are 1) perhaps the bank will bid the full balance, leaving no deficiency; 2) possible chapter 7 bankruptcy to discharge liability for the deficiency; 3)workout/settlement with the bank; 4) let the bank sue and live with the liability; 5) find a defense to the deficiency suit (no facts so far to formulate a defense). Consult a bankruptcy attorney to evaluate the bankruptcy option if ther is indeed a deficiency.