Alternatives to Filing for Bankruptcy in Michigan
In Michigan, filing for bankruptcy protects individuals from creditor’s collection efforts. Depending upon which Chapter you file under, there are certain advantages and disadvantages, but the idea is to allow the filing individual to address their unmanageable debt situation.
Bankruptcy alternatives can vary, depending upon the filer’s unique circumstances. Factors to be taken into consideration include the filer’s assets, income, types of debts, and debt levels. Filing for bankruptcy should be the last option and exercised when there is no viable option out of debt. It’s always best to contact a local bankruptcy attorney in Michigan and learn about your viable options.
Settle Credit Card Debts
Credit cards are considered unsecured loans, meaning debts that are not collateralized by liens on specific assets. In tough times, these debts are among the first to go unpaid. Delinquent credit card debts then start accruing higher interest rates and exorbitant fees.
When trying to trying to settle credit card debts, the approach taken depends upon a set factors. Factors usually include the age and amount of debt, who is holding the debt, debtor’s ability to pay, and the time left on the debt’s statute of limitations.
Often times the holder of the debt, usually a collections agency, is willing to settle at an amount lower than the original debt. This amount, depending upon the factors listed above, can be as low as 10 cents on the dollar.
Medical bills are also unsecured debts and with professional help, these too may be significantly reduced. Similar to credit card debts, medical bills are also among the first set of obligations to go unpaid when experiencing financial trouble.
The organizations holding this debt are willing to negotiate terms on which they may be paid back. However, the amount of flexibility in renegotiating depends upon a similar set of factors outlined above.
Real Estate and Foreclosure Prevention in Michigan
Real estate debt is considered secured debt, where the obligation is collateralized by a lien on the real estate in question, hence a mortgage. When a mortgage goes unpaid (typically 3 months in Michigan) the lender can and will initiate foreclosure proceedings to take possession of the real estate.
Fortunately, with real estate prices being so low, the lenders are willing to renegotiate the terms of the mortgage. Lenders are open to re-amortizing the mortgage, lowering the interest, and even extend the time length of the mortgage. It’s best to contact a Michigan bankruptcy attorney for localized information regarding your foreclosure proceeding.
Schedule a Consultation With a Bankruptcy Attorney
If you are considering bankruptcy and would like to learn more about your options, we would be glad to meet with you and review your situation during a consultation at our Troy office.