Jump to Navigation
Free Consultation

Contact Form

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Location

Charles J. Schneider, P.C.
39319 Plymouth Road, Suite 1
Livonia, MI 48150
Phone: 734-237-1523
Fax: 734-328-6006
Map and Directions

Subscribe to This Blog's Feed FindLaw Network

Wayne County Bankruptcy Law Blog

Military families report aggressive debt collection practices

We have covered the issues surrounding debt collection a lot on this blog, since aggressive debt collection practices are stressful and often illegal. People who find themselves in overwhelming debt that they are struggle to pay deserve fair treatment and are entitled to the benefit of lawful debt collection practices.

Recently the Consumer Financial Protection Bureau has been undertaking reforms to help protect people from unfair collection practices. One group that has been impacted significantly by aggressive debt collection is military families who are struggling financially. The Consumer Financial Protection Bureau says that they have received over 3,800 complaints from military families about consumer debt and about 4,700 complaints about mortgage debt collection.

Wage gap makes it harder for women to pay off debt

This week there has been a lot of news about the gap in wages earned by men compared with those earned by women. Today women in the United States make only 77 cents for every dollar a man earns, a figure that has hardly moved over the past four decades since the Equal Pay Act was first passed. Lower pay for the same work has a major impact for women, making it harder to support themselves and their families and impacting their long term financial health through proportionally lower retirement and other savings.

Another problem with the wage gap is that lower pay makes it harder for women to pay off debt. This fact has become even more of a problem in recent years as more women graduate from college and graduate school than men, racking up sometimes hundreds of thousands of dollars in debt, but wind up leaving the experience with less earning power than their male peers.

Tax debt becomes financial burden for disabled borrowers

When someone is diagnosed with a serious illness or suffers from a major injury, a lot of questions arise all at once. One big issue quickly becomes finances, which can suffer when someone is hurt and cannot work. In some cases the inability to work because of an illness can lead to the loss of one’s job and often their benefits, which can result in the accrual of medical and other types of debt.

Under current tax law when individuals who seek a debt discharge because they are disabled and cannot work must claim that discharged debt as income on their federal income tax return. Those with a disability have few options when it comes to paying their tax bill, since their inability to work was the thing that gave rise to their unpaid debt in the first place. Adding insult to injury, tax debt is almost never discharged during a bankruptcy proceeding, so those faced with large tax bills have few choices but to try to find a way to pay it back over time.

Paying down full amount of debt impossible for many Americans

There is a common assumption in the United States that the key to eliminating heavy debt is simply buckling down, working hard and paying down the debt over time. While this often romanticized scenario may be possible in some cases, many people throughout Michigan are saddled with insurmountable debt through no fault of their own. In many cases, paying the full amount of debt is simply impossible.

Consider these recent statistics regarding the debts carried by the average U.S. household:

  • Student loan debt: $32,258
  • Credit card debt: $15,270
  • Mortgage debt: $149,425
  • Grand total: $197,453

Pizza chain seeks bankruptcy again

National pizza chain Sbarro has announced that they are filing for bankruptcy protection for the second time in three years. The company says that they continue to struggle with overwhelming debt and not enough revenue from the dwindling number of customers that purchase their food.

The plan for the bankruptcy seems to be pretty well in place already. Lenders will take control of the company under the prepackaged deal that has been announced under Chapter 11 of U.S. Bankruptcy Code. The plan is to move quickly to cut the company’s debt by about 80 percent and exit the bankruptcy as soon as possible. In order to restructure in a bankruptcy, companies must get approval from each of their lenders who will be impacted by the move. In this case nearly all of Sbarro’s lenders have agreed to the plan, most likely because it represents their best possible scenario for being paid back or at least recouping costs.

Feds push for free credit scores for consumers

The Consumer Financial Protection Bureau has begun to urge credit card companies to provide credit scores for customers for free. This would be a major change from the way that most people access their credit information, through paid services or on free sites with strings attached. At this point there is no requirement for credit card companies to provide the information, but the industry is taking steps to voluntarily do so, with some taking action even before the recommendation.

As many people are aware, bankruptcy can take a major toll on a person’s credit score and after going through the bankruptcy process it may take a long time to rebuild an get a better rating. Being aware of one’s credit score and being able to access it from a reliable, secure source is very important. For borrowers who are seeking to repair their credit and start over after financial difficulties this can be an incredibly helpful tool.

Regulators target lending practices at for-profit schools

Attorneys general in 32 states and the federal Consumer Financial Protection Bureau are all working to stop the predatory lending practices of for-profit colleges in the United States. In particular, ITT Educational Services has been the target of investigations and several lawsuits after charging students more than $44,000 for associate’s degrees and leading them towards costly private student loans to finance it.

One of the biggest problems with this system is that student loans are incredibly hard to discharge during a bankruptcy, so borrowers who attended for-profit colleges may be stuck with that portion of their debt indefinitely. To add to that problem, many students who enroll and pay tuition at for-profit colleges do not earn degrees or find that the education they received is not well received by employers, so the investment does not pay off as well as it would for students who attended traditional colleges or vocational schools.

Loan modification scams may be hard to spot

When times get tough, Michigan residents look wherever they can to try to resolve financial difficulties that they are having. Sometimes this means taking on a second job or working overtime, or it might mean trying to refinance loans or consolidate debt in some other way. This can be a confusing process especially for those who are already behind on their payments and have begun to receive calls and letters from collectors, debt resolution companies, and others.

One area of difficulty that many people experience when they are seeking to resolve debt is distinguishing legitimate offers for help from those that are either not truly helpful or that are the work of scam artists. Recently authorities have identified a new, more sophisticated scam being perpetuated on those looking to modify their mortgages.

Same-sex spouses now eligible for joint bankruptcy

In a surprising announcement that took place over the weekend, Attorney General Eric Holder outlined a set of major changes to federal law enforcement for same-sex married couples. The federal government has previously stated changes to the federal approach to same-sex marriage in the wake of last summer’s Supreme Court decision striking down the Defense of Marriage Act, including the ability to jointly file federal income taxes. Now, same-sex couples who are legally married have the option of filing jointly for bankruptcy, even if they no longer live in a state where their marriage is legally recognized.

Married couples who experience financial distress and have debt that they are unable to pay off given their current earnings have the option of filing for bankruptcy jointly. Whether or not this approach is advantageous depends on the specifics of the case, but having the equal opportunity to take advantage of it when it would have a benefit will be a big help to many same-sex couples.

Getting out of debt in the new year

As the new year gets under way, many Michigan residents are thinking long and hard about their resolutions and how they can make meaningful changes in 2014. For a lot of people, that means figuring out how to improve their financial situation and get out of debt. There are many methods to resolving debt issues and starting out with a clean financial slate.

For example, financial experts recommend making a goal to cut out a small amount of monthly spending and set aside those funds to pay off debt. This might mean changing the grocery list, downgrading the cable subscription, or shopping around for a better deal on car insurance. Whatever the method, setting aside a few hundred extra dollars each month can go a long way, since paying off balances on credit card debt and other loans saves money on interest and stops the amplification of debt that can occur when you are just meeting the minimum payment.