For most people the decision to file bankruptcy in Michigan is extremely difficult. First, there is the fear of the unknown. Some people fear that their credit will be destroyed forever. Others fear that they will lose their property. Yet others fear the humiliation that their friends or neighbors will find out. Some fear that they will be harassed by their creditors at court.
Although filing for bankruptcy is a very difficult and important decision, most of people’s fears are unfounded. Ironically, most people’s credit improves after they file for bankruptcy. The majority of people filing for bankruptcy in Michigan already have fairly low credit scores. This occurs because their creditors keep reporting delinquent balances or obtaining judgments. Once a person files bankruptcy, all of their debts are generally discharged. As a consequence, there are no longer delinquent payments being reported dragging down their credit score. It’s not unusual to see a person’s credit score rise a 100 points approximately a year after filing for bankruptcy.
Most People Keep Their Property
Another fear people have is that they will lose their property. This fear too is unfounded for most people. The Bankruptcy Code allows people to retain most if not all of their assets. For example, a person could have $10,000.00 in the bank and file for bankruptcy or even up to a $1,000,000.00 in a retirement plan. The code provides for protection for a substantial portion of a person’s property in order to help them obtain a fresh start. In addition, a person can keep their car or their house as long as they agree to continue to make payments on that property.
Filing for bankruptcy is difficult for most people because of the fear of humiliation or because they believe they have failed in some way. Nobody generally makes it a strategy to file for bankruptcy. First, if your neighbors and friends will not find out that you filed for bankruptcy unless they make it a habit of checking the court files. Filing for bankruptcy should be approached more from a financial point of view and less as a moral problem. Problems happen to people that often have a negative impact on their financial situation such as a divorce, illness, job termination, or substantial depreciation in the value of their house. These problems may wreak havoc on a person’s finances if not addressed.
Bankruptcy Stops The Harassment
Some people worry about being harassed at court by their creditors. What many of these people don’t realize is that bankruptcy stops creditors from harassing them.
If a person is unable to pay their bills, a creditor can obtain a garnishment of their wages or seize their property such as a car or household items. Bankruptcy stops creditors from collecting. Although creditors may appear at court to question a Debtor, it is rare that they do.
We understand that filing for Bankruptcy is an important and difficult decision. It is a decision that a person should make only after consulting a professional with expertise in the field. My Firebaugh & Andrews specializes in helping people file for bankruptcy. We have helped thousands of people discharge their debts under Chapter 7 or reorganize their finances under Chapter 13.Firebaugh & Andrews has been practicing bankruptcy law for over 50 years combined.
We offer free consultations to help people understand how bankruptcy would affect them and to take the unknown and fear out of filing for bankruptcy.