If you are facing financial stress which is leaving you unable to repay your debts or meet your expenses, probably this is the right time you should be thinking about filing bankruptcy. Most people wrongly believe that bankruptcy is something to feel embarrassed about, however there is no shame in taking back the control of your financial future.
Since the market crashed in 2008, there has been a rise in the number of bankruptcy cases filed every year in the US. Federal law allows U.S. citizens and residents to file for bankruptcy under financial distress. Under bankruptcy laws, you are relieved from mounting debts by the creditors under different conditions and can definitely make a fresh start. However, when making a decision about filing, it is important to consider that every state has different laws and conditions pertaining to bankruptcy.
If you are indecisive whether or not to file for bankruptcy in Michigan, you need to consider a few factors and weigh the pros and cons. For instance, in Michigan, you will not be liable to pay back your creditors; on the other hand, it will affect negatively your credit.
Why Should You File Bankruptcy in Michigan?
- Protection of Automatic Stay:
Being unable to pay back your debts can leave you in legal trouble from the creditors. For instance, if you are not paying your mortgage payments as required, the bank can foreclose on your property. Similarly, if you don’t pay minimum credit card bill, the company may raise the interest rate or demand payment in full, or even can sue you and seize your property.
But you don’t need to worry, as you are protected if you are filing for bankruptcy in Michigan. Because according to Michigan law, you can stop your creditors from the legal actions. You can discharge your debts, restructure the payments, and can go without the fear of the creditors and their legal actions against you.
- Discharge of Debts:
The most important benefit of filing for bankruptcy is that you discharge all of your debts. Although based on your petition, this process can take ample time even 3 to 5 years, this is an effective and practical way to get rid of debts. Once you liquidate your assets to pay back creditors under Chapter 7, the court discharges all the remaining debts. Whereas, under Chapter 13, the process is more gradual than Chapter 7.
Your Job is Not Affected:
One of the most common fear among bankruptcy filers is that their employer will either terminate or demote them after learning about their filing for bankruptcy. However, the bankruptcy code protects the filers in both private and public sector from the discrimination on the part of filers’ employers on the basis of bankruptcy. So, the bankruptcy cannot be a cause of demotion or firing of an employee.
You are Free to Keep Your Property:
It is a misconception that you cannot retain your property and will remain penniless after bankruptcy. Whereas, bankruptcy exemptions in Michigan, you can exempt certain properties from bankruptcy; be it a car or house, you can keep them.
- You Can Lower the Debts Payments:
If you are filing bankruptcy under Chapter 13, you can reduce your debt repayments and even repay them over a long period of time.
Why You Shouldn’t File for Bankruptcy in Michigan?
While there are several pros of bankruptcy in Michigan, there are few cons that one has to keep in mind.
- Your Credit History will Suffer:
The biggest and most important concern is that it will damage your credit history, which refers to the lenders who will not lend you money- this will consequently damage your ability to buy property like home, car rent an apartment or even keep a credit card.
Other Cons of Bankruptcy in Michigan:
Apart from your credit history, you may have to:
- Lose your credit cards and credibility to use them
- Give up luxuries, expensive possessions
- Certain loans such as alimony and student loans may not be discharged
A Fresh Start:
Filing for bankruptcy in Michigan allows you to rebuild your damaged credit history. Once you make repayments regularly, it improves your credit score, making it easy for you to obtain credit in the future.
Especially, if you are filing under Chapter 13, you on time and regular repayment will improve your credit again making your financial position better.
Note from the Author:
This article was created in collaboration with the Desmond Law Office, PLLC. The attorney James Desmond has successfully handled thousands of cases across the United States, in both state and federal courts. Contact the Desmond Law Office when you need assistance from a Bankruptcy attorney in Louisville, Kentucky.