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Michigan Supreme Court Adopts Bankruptcy Notification Rule

The Michigan Supreme Court has adopted a new rule that applies when a party to a pending lawsuit in state court is named a debtor in a bankruptcy proceeding. Effective May 1, 2024, MCR 2.421 will require a party to notify the court within three days of becoming subject to a bankruptcy proceeding and to serve the notice on all other parties in the case.

The rule also establishes the contents the notice must contain, permits a non-debtor party to file and serve the notice if not previously completed by the debtor, and sets forth the steps a court may take upon receipt of the notice. For debtors and creditors alike, MCR 2.421 is intended to clarify the parties’ responsibilities in light of the obligations imposed by the automatic stay under Section 362 of the Bankruptcy Code.

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