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Ann Arbor Bankruptcy Law Blog

Summit Products LLC files for protection of Chapter 7 bankruptcy

Many a successful business has fallen prey to the adverse economic conditions of recent years. One such Michigan company was reportedly listed among the top 100 private companies in Birmingham. A toy manufacturer, Summit Products LLC, with its headquarters based in Birmingham's Southside, has recently filed for the protection of Chapter 7 bankruptcy.

The toy company is currently offered for sale as part of the asset liquidation process. The asking price is reported to be $2.2 million. The core brands of Summit Products LLC are Backyard SafariTM and ZikkionzTM, and they are offered for sale on Amazon, along with retail chains such as Toys-R-Us, Wal-Mart and Target and other specialty stores nationwide. Summit Products reported their assets to be $1.6 million, and their liabilities were listed at over $6.8 million.

Michigan homeowners warned about alleged foreclosure scammer

Matters may be improving after the recent recession, but the after-effects may still be causing financial hardship for some Michigan homeowners. Unfortunately, there may always be those who take advantage of the weaknesses of others. Michigan homeowners deserve to be warned about one such individual who was apparently scamming people facing foreclosure.

Reports from the Attorney General's office revealed that a man from another state was using the cover of a nonexistent religious organization to defraud homeowners in Michigan. The scam was exposed when the man allegedly offered to assist one of his employees in protecting her from foreclosure. When she realized that she was being scammed, she reported it to authorities.

Owner of Naked Furniture opts for the protection of Chapter 7

An exciting part of being a newlywed couple is choosing furniture pieces for the new home. One such newlywed couple was very disappointed when the items ordered and paid for at a retailer's showroom were not supplied before the retailer filed for the protection of Chapter 7 bankruptcy. They were not the only Michigan clients experiencing such disappointment.

The owner of the business explained that he had applied for a loan to tide him over, but was unable to advise clients of his intent to file for bankruptcy until the loan application was denied. He admitted that clients would order and pay for furniture pieces that had to be manufactured in another state. However, he only paid the manufacturer once the items were delivered to him. In many instances, he related, the clients' funds were spent before the ordered items were delivered to him.

Michigan homeowners fall prey to foreclosure rescue scams

Operators of foreclosure rescue scams have been active in Michigan, and many homeowners have been victims of their devious promises. The Homeowner Protection Fund has a division that provides restitution for victims of these unscrupulous scammers. The Attorney General has recently announced that $144,542 will be dispersed to over 112 homeowners who fell prey to the Hope4Homeowners foreclosure rescue scam. After complaints from homeowners, investigations were conducted into the activities of Hope4Homeowners. Following the investigation, the scamming company was charged with three counts of violating Michigan's Credit Services Act.

The scammers made various dishonest and deceptive statements, including guarantees to avoid foreclosure and declarations that homeowners could evade foreclosure despite their credit scores and home valuations. The laws of Michigan disallow the companies who profess foreclosure rescue and advice to charge any fees prior to completion of their service to the homeowner. Complaining homeowners had to pay amounts ranging from $595 to $3,000 in advance. The Credit Services Act allows the office of the Attorney General to obtain reimbursement on behalf of the distressed homeowners. It also allows penalties of up to 90 days' incarceration and/or a fine of $1,000.

Teach Michigan children about credit card debt

Most Michigan parents may recall that the time they went to college was the first time they had their own credit card. They may also remember how they had to learn through their mistakes and how long it took to build up a good credit score in order to be regarded as credit worthy when they wanted to buy a car or rent an apartment. Some feel that it would be better if we taught our children how to manage credit card debt and start building their credit score while they are much younger so they can be ready for financial responsibility during and after college.

One good way to start achieving that goal is by using everyday situations to explain the way credit cards work, not omitting what the consequences of nonpayment are. The next step could be to add the child to a parent's credit card as an authorized user. This is where the parent needs to make very strict rules and not hesitate to confiscate the card when rules are broken. This can be their first step on the child's path to building a good credit score.

Credit card debt in Michigan: Is debt transfer a good option?

After the effects of the recent recession, enticing offers made by credit card issuers to transfer credit card balances to cards with zero or low interest rates could be hard to resist. Michigan credit card holders may want to consider such offers carefully. When one's credit card debt is at a level that causes anxiety, it could be easy to accept offers for very low interest rates, without realizing that one may be worse off in the long run.

Not all issuers of credit cards offer the same advantages, and consumers can be offered either a deal where no fees will be charged on the transferred amount, or the offer may include a charge of between three percent and five percent of the transferred amount. Considering this, the fee on a transferred balance of $10,000, which is usually added to the debt, can be a whopping $300 to $500. Consumers may also find that the reduced interest rate is only offered for a restricted period. One of the conditions normally stipulated for such transfers is that the transferred amount has to be paid off within that specified period. If one fails to do that, interest rates from approximately 10 percent to over 22 percent could become effective.

Credit card debt escalates when it is used as an emergency fund

Michigan readers may be interested in the findings of a recent poll regarding credit card debt and savings. The poll showed that 28 percent of Americans have credit card debts that exceed their personal savings and 17 percent have no credit card debt but also no savings. This indicates that almost half of all American citizens have insufficient or no savings, while over a quarter have excessive credit card debt.

An alarming fact that has come to light is that many people use their credit cards as emergency funds. Unemployment and underemployment have had a devastating effect on the finances of many families. The report mentioned the case of a bookstore owner who had been hard hit by the recession. The enormous drop in sales had resulted in some months when the business did not generate enough income to cover the payroll, and her only option was to withdraw cash from her credit card to make up the shortfall. This became a vicious circle, because as soon as she was able to make the minimum payment on the credit card, she would need to withdraw it again for another emergency.

Fifth Third Bank falsely reported clients with credit card debt

For most Michigan residents, establishing and sustaining a respectable credit score is crucial. Many people work very hard at avoiding overwhelming credit card debt and defaulting on payments of existing debt. Failing to practice proper debt management could result in a low credit score, which directly affects one's ability to obtain loans of any kind. Furthermore, it will also negatively affect insurance rates, job applications and more.

Imagine the alarm for people, who may have maintained good credit scores, when they received a letter sent by the bank to inform them that they had inadvertently been reported to credit bureaus as having filed for bankruptcy. This is exactly what happened to credit card clients of Fifth Third Bank in February. Reports that approximately 21,000 clients were affected by these false reports were not confirmed by the bank.

Purchase offer for peanut giant Sunland Inc following Chapter 7

In recent unstable economic conditions, most of us have witnessed successful companies fail as a result of unforeseen adverse circumstances. Michigan readers may recall the involvement of the peanut giant Sunland Inc. in the countrywide salmonella outbreak of late last year. Product recalls proved to be the final nail in its coffin, and Sunland Inc. filed for the protection of Chapter 7 bankruptcy after that.

With Chapter 7 bankruptcy, the unsecured property of the debtor is sold to pay dischargeable debt. It also protects the filer from foreclosures, repossessions and garnishments while bankruptcy proceedings are pending. Protection also exists regarding liens, lawsuits and any creditor harassment . Sunland's assets were estimated at approximately $50 million in previous court filings, but three of the company's creditors regarded this as a potentially inflated figure.

Michigan residents may be unable to settle extreme medical debt

When Michigan residents are injured or have an illness requiring medical care, they are likely to face overwhelming medical bills. A survey showed that a quarter of American families found it difficult to settle their medical accounts in 2012. It also indicated that one family out of every ten had medical debt that they would be unable to pay.

A big concern that was expressed is that serious illnesses can go untreated when people don't have health insurance. One physician reported that a patient failed to seek medical care for a breast tumor because she was without health insurance. If illnesses like cancer are not treated timely, the consequences can be fatal. Doctors stated that even those signing up for the Affordable Care Act may struggle to afford the payments.

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