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Ann Arbor Law Blog

How a dismissed bankruptcy affects credit

People in Michigan whose bankruptcies have been dismissed might wonder how this will affect their credit rating. A dismissed bankruptcy may occur either with or without prejudice.

In the latter example, a bankruptcy is dismissed because of an error in the paperwork or another procedural mistake. If this happens, the person can refile immediately. The person can also request that the automatic stay from the previous bankruptcy be carried over. In the former example, the bankruptcy is dismissed because of committing bankruptcy fraud, filing multiple bankruptcies as a way to hinder creditors, not following court orders or other disruptive behavior.

What the Fed's decision means for borrowers

Michigan residents who have adjustable-rate mortgages or home equity lines of credit may see their monthly payments go up. The same is true of those who have outstanding credit card balances. This is because the Federal Reserve has increased interest rates to between 1 and 1.25 percent. It is expected that the Fed will raise rates three times a year until 2019.

Those who have 30-year mortgages may see rates change gradually, and mortgage rates may increase as the Fed seeks to reduce its $4.5 trillion balance sheet. Rates on auto loans may also go up in the future, but they are being kept down because of a competitive market. The average interest rate on a credit card balance is 15.07 percent. This means that a person with a $5,000 balance will pay about $175 in interest. However, if the Fed increases rates by a quarter-point three times a year, a borrower will pay an additional $525 in interest each year.

Credit card debt consolidation options

Michigan consumers who are struggling with credit card debt might wonder what options are available for consolidating those obligations. The first thing a person in this situation should consider is whether it is possible to pay off the debt in three to five years and if the debt is less than half the person's income.

If either of these is untrue, then the debt may be too high and bankruptcy may be a better option. In a Chapter 13 bankruptcy, five years is the maximum amount of time of a repayment plan while in Chapter 7, all eligible debts are wiped out. Other options might be transferring debt to a zero percent balance credit card or taking out a debt consolidation loan with a lower interest rate.

Criminal defense and the right to a speedy trial

Being arrested can be a worrisome experience. Often, those who are placed under arrest will be unaware of their legal rights. A Michigan person facing trial on a criminal charge has a right to a speedy trial before an impartial jury. This is a guarantee based on the Sixth Amendment to the U.S. Constitution.

It is vital to understand the details of the right to a speedy trial. A person facing criminal charges must be tried within a reasonable amount of time. The Sixth Amendment protection is based on the case itself and if there is a viable reason for any delay. When there is an extreme circumstance and the court decides that the delay from arrest to trial led to an unreasonable and prejudicial treatment of the defendant, the case could be dismissed.

How to help a child understand divorce

Divorce can be an emotional event for any Michigan residents to go through. However, as difficult as it can be for an adult, the end of a marriage can be just as hard on any children estranged parents may have. To ease a child's mind, parents should be upfront and honest about what is going on. Children should also be assured that their parents still love them.

Kids may have questions and concerns about the divorce as events unfold. Therefore, parents should make sure that they have the ability to ask those questions or express their concerns. It is also a good idea for parents to check in on their children as they may be struggling internally even if they seem to be doing alright on the outside. As a parent, it is critical to not put a child in the middle of a dispute with the other parent.

Reasons a gray divorce may occur

Michigan couples who have been married for more than 30 years may have seen the headlines reporting that divorce rates for those over the age of 50 have continued to climb. While the number of divorces for those over the age of 50, called gray divorces, have risen, the risk of divorce is not the same across all demographics.

First, it is important to note that the divorce rate for those over the age of 50 is still not high. Even though the rate has doubled since 1990, only about 10 out of every 1,000 married people were divorced in 2010. Further, the gray divorce rate was still half of the divorce rate for those under the age of 50.

Important steps to getting past a bankruptcy

When a Michigan resident files for Chapter 7 bankruptcy, it will stay on their credit report for 10 years. Those who file for Chapter 13 bankruptcy will see it remain on their credit reports for seven years. However, the effects of the bankruptcy do not necessarily last for that long. According to a study done by TransUnion, only 10 percent of those who file for bankruptcy will do so again.

An important step an individual should take when overcoming a bankruptcy is reading their credit report. Individuals are allowed one free copy of their report per year from each of the three major credit bureaus. If errors are discovered on the report, a person may contact the lender who reported the error or report it directly to the credit bureau. Errors may include duplicate entries or outstanding judgments that should have been reported.

Retroactive alteration of confirmed plan payments disallowed

The bankruptcy processes in Michigan and across the country are governed by federal law. With some important exceptions, Chapter 13 is basically a uniform code for all of the United States. A bankruptcy trustee in Texas retroactively adjusted confirmed Chapter 13 plan payments in 25 cases. In an opinion issued in April, a U.S. bankruptcy court judge called the actions disturbing and shocking.

The Texas trustee's retroactive adjustments violated the rules for Chapter 13 bankruptcy, according to the judge. Chapter 13 debtors are required to agree to a plan to make payments to creditors from future income, and the plan must be approved by the court. A typical plan will provide that, if there is a difference between the amount of an allowed claim and the amount listed in the plan, the allowed claim is adjusted to meet the terms of the plan.

Why it might be a bad idea to testify in your own defense

Many lawyers advise clients not to testify in their own defense, but sometimes, the clients go ahead and do it anyway. Frequently, this testimony turns out to be a mistake.

Lawyers know the criminal justice system well. If they advise you to not testify but you want to no matter what, it is important to consider the reasons why testifying might hurt your case.

Bankruptcy court rules woman can discharge recent debts

Michigan consumers who have recently put charges on their credit card might wonder whether they would be able to discharge them in bankruptcy. A West Virginia bankruptcy court held that a woman who took a cash advance in the amount of $7,993 two months before filing for Chapter 7 bankruptcy could have that obligation discharged.

The bank argued against this. The Bankruptcy Code says that services charged within 90 days of filing for bankruptcy or luxury goods totaling more than $675 could not be wiped out in bankruptcy if the charges were to a single lender. However, the court argued that the bank did not prove that luxury goods were purchased. It only found that the woman had spent $420 on boots and a computer game. According to the bank, an additional charge of $183 from Kohl's was not necessarily a luxury good and could be attributed to the woman's efforts to replace household items lost in a fire.

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