Legal Question in Bankruptcy in Michigan

Yes, it is a possibility. The question is whether the home can be claimed as exempt. The answer is complicated and I would need detailed information in order to be able to answer that question. The law on the issue is complicated and uncertain, especially at this time since the Michigan bankruptcy-specific exemptions have been found to be unconstitutional.

From a different perspective, Insurance perspective, you can approach the State of Michigan and apply to release the funds they hold in reserves and apply these when an insurance company is out of business and bills come due. Looking at the facts, not much time has elapsed between the dates of service - Dec 2010 and today. The insurance company was probably in operation at the time of surgery. If you paid insurance premium for the time period and obtained a service that was a covered benefit of the insurance, the insurance company is likely to be liable for the bill. If they are out of business by the time the provider files the insurance claim, State of Michigan should apply reserves to the bills.

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Best -- JS