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Wayne County Bankruptcy Law Blog

Things to consider before filing for personal bankruptcy

Personal bankruptcy can be an effective way for people dealing with financial challenges to get rid of paralyzing debt. Many people have compared it to a reset button for people looking for relief from overwhelming debt. Still, the decision to file for bankruptcy is a major life decision for Wayne County residents, and it is a good idea to consider a number of factors before taking the plunge.

The first thing to consider is alternatives to personal bankruptcy. Bankruptcy is just one of a number of possible ways to deal with debt. In order to get a clear view of your situation, it may be worthwhile to take a close look at your finances, including the nature and sources of your debt and the possible consequences of a number of actions. You may find that there would be no serious consequences to not filing for bankruptcy. You may also find that negotiating with one major creditor may be more effective and less hassle.

Medical debt will stay off credit reports longer under changes

When a medical emergency occurs people generally go to a medical professional for help. In these situations, the last thing on many Michigan residents' minds is the cost of the care. They often just want the doctors, nurses and other medical professionals to do whatever they can to fix the issue and get them on the road to recovery.

Following the emergency, however, the medical bills will start coming in. Often these bills can be astronomical -- even for simple medical issues. Even people with health insurance can be surprised to see how much they owe following a medical emergency. Many people cannot afford to pay these bills or are locked in a struggle to get an insurance company to pay for them.

What is Chapter 7 bankruptcy and how does it work?

Wayne County consumers looking for a fresh financial start have probably heard of Chapter 7 bankruptcy and may be wondering how it could help them. This blog post describes the basics of Chapter 7 and how it could help a consumer obtain debt relief.

In a successful Chapter 7 bankruptcy, a consumer enjoys immediate and complete relief from dischargeable debts. Dischargeable debts include credit card debt, other kinds of unsecured debt and medical bills. Dischargeable debts do not include child support and student loans. These debts are very difficult to eliminate through bankruptcy.

Michigan steel manufacturer files for Chapter 11 bankruptcy

Michigan business owners know that expanding operations can be a good and necessary step to maintain their position in the marketplace and even grow. Conducting an expansion can be a bit of a gamble: The rewards can be big, but an expansion can also be harmful if the timing or execution isn't right. One area business seems to have had this kind of experience.

Lee Steel Corp. is a steel manufacturer that employs 65 people at three Michigan locations, including one in Wayne County. A few weeks ago, the company filed for Chapter 11 bankruptcy. Court records indicate that Lee Steel owes over $50 million to its creditors.

Creating a repayment plan that works for you

When facing financial challenges, people have a variety of debt relief options. Some of these options might be a "quick fix" while other may require some significant work. When people are considering Chapter 13 bankruptcy, in particular, they are often looking to solve significant financial issues. They may want to keep their home, car or other expensive good, while relieving some debt.

In order to do this, Chapter 13 bankruptcy requires that people have some sort of income. Then, part of this income is used to pay down the debt over a period of three or five years. Before the bankruptcy, people will be given the opportunity to create a repayment plan for these debts. This plan must meet certain legal requirements in order to be accepted by the court. For example, a person's surplus income must be used to pay creditors during the repayment period.

Understanding Chapter 13 and its benefits

It's not unusual for people in Wayne County to face various financial issues that make it necessary for them to consider options to get a fresh financial start. One such option is Chapter 13 bankruptcy. Filing for Chapter 13 must be fully understood before moving forward with it. Chapter 13 is useful for people who have a job and earn a living. The process lets eligible people come up with a plan to pay what they owe. A repayment plan will be proposed and paid in installments so the debt is cleared in three to five years.

The amount the person filing earns will determine whether or not they will be approved for Chapter 13. If the person's income is lower than the applicable state median, then the plan must be for three years unless there is a court approval. A debtor who has an income per month that is higher than the applicable state median will usually have a plan for five years. No Chapter 13 bankruptcy can be for more than five years.

Dealing with credit card debt and conquering it

Unfortunately, encountering financial problems, no matter how small, is not uncommon for Michigan residents. While some individuals and families are able to timely and fully address these temporary issues, others are not so lucky. For some credit card holders, debt can rack up quickly, causing it to become unbearable. For these individuals, it is important to understand ways to better manage their debt and conquer their financial troubles.

Dealing with credit card debt is not an easy task, but a recent report by Fox Business broke it down into four methods that could assist debtors with their current and future debt. Whether they use one, some or all of these methods, if properly used and consumers change his or her spending habits, the debtor could obtain a healthy financial life.

What is debt restructuring for credit card holders?

When financial problems are present your life, they tend to impact and extend to all areas of your life. Dealing with debt can be extremely troublesome and worrisome, causing residents in Michigan and elsewhere in the nation to consider their options to deal with this debt that seems to be never ending. Because filing for bankruptcy is sometimes considered as a last resort to obtain debt relief, it is important that individuals consider debt restructuring.

What is debt reconstruction? For consumers struggling to deal with their credit card debt, debt restructuring is a way to address their financial problems. Although credit card companies do not publicize these strategies, a debtor could communicate with their credit card company regarding a hardship program.

CAN YOU AVOID YOUR CREDITORS AND NOT FILE BANKRUPTCY? PART I

All too frequently clients have said the following words, "Filing bankruptcy is the last thing I thought I would ever do", when the filing of a bankruptcy should have been thought of sooner. No one plans to file bankruptcy when they take out debts. The overwhelming majority of Americans voluntarily pay their debts. Credit card companies and other lenders count on this fact. Clients sometimes engage in strategies that may backfire in order to avoid filing bankruptcy.

The following strategy was engaged in by a client of another lawyer whose bank accounts had been garnished by creditors. In order to avoid further garnishments, the client decided to deposit the money from his paychecks into his mother's bank account to shield it from the garnishing creditors. This arrangement continued for over a year. He would later file bankruptcy and say that his mother paid his bills at his direction. He would state that at no time would his mother use his money for her purposes. He was in charge of the account. She was merely a delivery person acting upon his instructions. He had to, after all, take care of his family making sure his family would eat. It was his money.

Credit card debt rose for average U.S. citizens last year

Many Michigan residents are aware of the allure of credit cards. Credit cards offer the ability to pay for goods and services that a person may not otherwise be able to afford at the time. Sometimes, however, this allure can prove to be destructive - a fact millions of Americans can attest to. Countless people have experienced the nightmare of being trapped with credit card debt. To escape this trap, drastic measures often must be taken. Bankruptcy is one such measure.

Michigan residents may be shocked to learn just how high the total amount of outstanding credit card debt was in America last year. A year prior, the total was $606.75 billion, an enormous number. But as of December, that number is ever higher - outstanding credit card debt increased to $642.4 billion.

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