With all of that said, there do appear to be signs that fewer people are filing for bankruptcy now than during the peak of the economic downturn. In one Michigan county, the number of annual bankruptcy filings has fallen by nearly 1,000 since the same time period in 2010. This could be a sign that the economy has improved slightly. On the other hand, some believe that it could suggest that those who were in the worst financial straits were forced into filing bankruptcy sooner than others.
]]> The current recession has caused many people to lose their jobs and have difficulty getting new ones. Some may also be struggling with excessive medical bills that they simply cannot afford to pay off. Plummeting housing prices have also saddled a number of homeowners with houses that simply aren't worth as much money as they currently owe in mortgages. All of these combined mean that some people simply can't recover from the financial blows they have been dealt.These are the people for whom the Bankruptcy Code was enacted. Those across the country and in Michigan who want to pay back their bills but just can't afford their current monthly payments may wish to look into the possibility of filing a Chapter 13 bankruptcy. This form of bankruptcy allows a debtor to restructure their debts and repay them on a payment plan that typically runs over a course of five years or so. There is no shame in filing for bankruptcy and, while it may not be for everyone, for some people it truly can be the best way toward greater financial success in the future.
Source: mlive.com, "More than 37,000 bankruptcies filed in Genesee County in past decade but numbers on decline," Gary Ridley, June 6, 2013
]]>These individuals meet before foreclosure auctions and agree on one buyer per property and what price will be offered. Then the 'bargain hunter' appears at the sale on courthouse stairs and wins the fixed auctions. After the sale they meet again, often right out in front of the same courthouse, and hold a private auction for prices that are closer to fair market value. They then split the profit made between the first and second auctions.
]]> Federal investigators have been aware of this practice for a long time. Prior to 2008, a home in a fixed auction would net a scam artist upwards of $5,000 on each property. However, the recent boom in foreclosures coupled with the depressed market values of the properties has made this bid-rigging a highly profitable scam. In recent years, federal prosecutors have rounded up several people and two companies in three separate states. These scams were hurting the homeowners who were already in difficult financial situations.How can Michigan homeowners who may still be struggling avoid becoming victims in this kind of scheme? There are legal tools available that can help if you are behind on your mortgage and can often stop a foreclosure that has already been initiated by the mortgage holder. Being aware of your rights and the options available can keep your home off the auction block and out of the reach of scam artists like these.
Source: Huffington Post, "Foreclosure Auction Scams Face Federal Crackdown," Paul Elias, June 1, 2013
]]>Trust is a major component of selecting a bankruptcy attorney. Ideally, an individual or family will be taking advantage of the advice offered throughout the process, and making decisions and changes that are suggested by their legal counsel. Without beginning the process with a solid foundation of trust, filers can easily become disenchanted with the process and feel powerless to make the changes necessary for future financial success.
]]> In order to establish a good working relationship, the best approach is to make appointments with several attorneys and sit down to go over the process. A good attorney will ask questions about an individual's current financial scenario and their future goals. In some cases, filing for Chapter 7 bankruptcy may not be the best solution, and the attorney may suggest alternative debt reduction options. If an individual has found an attorney they trust, taking those suggestions is an easier leap of faith.As with any significant working relationship, it is important to select a Michigan attorney with whom one feels comfortable. This is an individual who will be delving into one's personal financial history in order to complete a Chapter 7 bankruptcy filing, and trust is a key component of a successful outcome. The filer must be able to not only share the details of his or her current financial standing, but also how the situation came to be. In this way, the attorney can make suggestions for the future that can lead to a greatly improved financial outlook.
Source: Fox Business, "How to Pick a Bankruptcy Attorney," Erica Sandberg, May 21, 2013
]]>The suit alleges that J.P. Morgan used improper practices in commencing a large number of lawsuits through the use of robo-signing, a phrase that gained notoriety during the foreclosure crisis. Robo-signing occurs when an employee of the bank, or a bank representative, signs a sworn document without properly checking bank records to confirm the facts underlying their statements. This practice has put thousands of credit card debt lawsuits into question.
]]> The California suit also alleges that the bank failed to conceal the personal information of debtors in their filings, which could potentially expose them to identity theft. It has been estimated that thousands of residents could be impacted. It is unclear whether other states are looking into this practice as well to see if they may have a claim against J.P. Morgan.Credit card debt is a serious issue for many Michigan residents. With high interest rates, many may feel that there is nothing they can do to get back on top of this mounting problem. However, by looking at all the options, there may be a way to navigate through this debt to a more prosperous future.
Source: CNN Money, "California accuses JPMorgan of fraud in credit-card-debt collection," May 9, 2013
]]>A new state program has allocated $5 million to assist active service members and veterans in keeping their homes. The program is geared towards assisting those service members and veterans who have faced issues with keeping up with their mortgage since 2006. Surviving spouses of those military members who have passed away may also be eligible for relief.
]]> State officials have stated that this relief is needed, as many service members' deployment overseas has made it impossible for them to properly handle foreclosure proceedings. It was not made clear what criteria need to be met in order to be eligible for the relief. It is also not clear at this time when the program will officially start taking applications.Given the struggles of many Michigan residents who have been greatly affected by the foreclosure crisis, any potential relief offered may be the hope they need to get back on track. Foreclosure may still be an unfortunate reality for many, but looking at all the options may reveal a course of action to confront outstanding financial problems once and for all. Only by understanding these options can an individual make the right decision for them and their family and move forward in the fashion that best fits their short and long term goals.
Source: The Morning Sun, "State to help vets, military members caught in foreclosure crisis," May 8, 2013
]]>Chapter 13 allows for a payment plan in monthly installments for a three to five-year term. Chapter 13 is often used for an individual or married couple to keep the residential home when the mortgage is in arrears. They can make payments to get the mortgage back on a current basis.
]]> At the same time, however, Chapter 13 allows for the wipeout of large amounts of credit card and other unsecured debt. In many instances, depending on your income, you may end up paying nothing or a few cents on the dollar toward credit card debt in a Chapter 13. That amount will be determined by your counsel while reviewing your information and preparing your payment plan with you.Chapter 7 does not contain a payment plan. It's used to erase large amounts of unsecured debt such as credit card balances. It's called liquidation on the premise that if there are any nonexempt assets, they will be liquidated to pay toward the debts listed. However, in the typical consumer filing of a Chapter 7 bankruptcy, no assets are liquidated.
That's because there are exemptions provided by law that allow a consumer to retain the basic range of possessions and furnishings possessed by most people. In a Chapter 7, you'll be able erase all of your unsecured debt. At the same time, you'll retain all of your standard furnishings and belongings.
In a Chapter 7, you can keep your home if it's paid current and if you want to continue paying your monthly mortgage payments. If you have too much equity in your home, you may have to file a Chapter 13 instead. Whether in Michigan or elsewhere, that's the kind of question that can only be determined after going over all of your financial information with an experienced bankruptcy practitioner.
Source: Santa Barbara Independent, "Liquidation or Reorganization?" Harley Hahn, May 5, 2013
]]>Unfortunately, one Michigan man has been threatened with foreclosure several times in recent years. He, like many others in our state, lost his job a few years ago. Since then, he has been unable to make mortgage payments. Although he says he has done everything he can, including getting roommates, he feels like he has run out of options. What makes his situation particularly frustrating, however, is that he says the bank will not work with him.
]]> The man's mortgage is owned by Bank of American. But through his financial difficulties, he says they have been unwilling to modify his loans. He says the bank has tried to evict him several times without even attempting to work with him on finding a solution.Sadly, many people in Ann Arbor and throughout the state of Michigan have faced foreclosure before. When a bank tells you it is going to take your home away, it can feel like there is nothing left you can do. That, however, is not always true. Attorneys who are experienced in working with foreclosure know that there are ways to fight it. Just because a lender has threatened you, doesn't mean there is no hope left.
Source: WWMT, "Homeowner protesting against Bank of America's attempted foreclosure," April 26, 2013
]]>The main difference between Chapter 7 and Chapter 13 is that a Chapter 13 filing reorganizes your debts before discharging any of them. After filing, you will have to create a three- to five-year plan to repay your debts. This plan has to be approved by a bankruptcy court before you can begin. As we alluded to before, Chapter 13 is usually for individuals who have more substantial incomes.
]]> Just like a Chapter 7 bankruptcy, a Chapter 13 filing will show up on your credit score for a few years after you file. A Chapter 13 bankruptcy, however, will only show up for seven years after you finish your repayment plan -- three years less than a Chapter 7 filing.For some Michigan residents, filing for bankruptcy may seem like a scary or even shameful thing. However, 1.2 million people filed for bankruptcy last year alone, and it's likely that many of those people found that bankruptcy was the best way to handle unmanageable debt. In fact, some lenders even view bankruptcy as a responsible way to handle debt.
Now that you know the basics of the two most common types of personal bankruptcy, hopefully you feel a little more prepared if you are considering bankruptcy. However, it is still important to work with an attorney to ensure that the process goes as smoothly as possible. Bankruptcy is a complicated process, so don't do it alone.
Source: Fox 12, "Know these bankruptcy facts before you file," Andrew Housser, April 15, 2013
]]>The first type is Chapter 7 bankruptcy. To qualify for Chapter 7, you must pass a test, known as a means test, to prove that it is basically impossible to repay the debt that you owe. If you meet the requirements, a Chapter 7 bankruptcy involves liquidating your assets. Because this type of bankruptcy discharges your unsecured debts, you will have to sell at least some of your possessions in order to pay off debts. Depending on your particular situation, you may have to sell your home.
]]> Next, it is important to know that not all debts are dischargeable through bankruptcy. Secured debts, including student loans, spousal support, child support and tax debts will generally stick with you through bankruptcy. Getting rid of other debts, however, can help free up some money to put toward these debts.Finally, know that filing for bankruptcy will affect your credit score for a while. If you file for Chapter 7 bankruptcy, it will show up on your credit report for a decade. Many people, however, are still able to qualify for credit after bankruptcy.
When faced with debilitating debt that you have no way of paying off, bankruptcy may be the right options for you. It is important, however, to approach it with appropriate expectations, which is why many people find it helpful to work with an experienced attorney.
Source: Fox 12, "Know these bankruptcy facts before you file," Andrew Housser, April 15, 2013
]]>If you have been in this situation, know that you are not alone. In fact, a study conducted by the National Bureau of Economic Research two years ago found that half of Americans would have a hard time coming up with $2,000 to pay for medical bills. Only a quarter of Americans said they would be able to come up with the money without using credit cards, tapping into a savings account or using other methods for help.
]]> Interestingly, a new trend in paying for medical bills is quickly rising. Some people who are in desperate need of money for treatments are turning to crowdfunding. Through websites like GiveForward and YouCaring.com, an individual can create a campaign and ask friends, families, co-workers, neighbors or even strangers to pitch in to help cover their medical bills. Last year, one woman raised more than $40,000 to help cover the specialized treatment she needed to fight cancer.While crowdfunding works well for some people, it may not cover everything or be the best method for others. However, there are still options when debt becomes too much to handle. An attorney can explain how bankruptcy could help you find debt relief.
Source: Forbes, "When Medical Bills Pile UP, Can You Crowdfund Your Health Care?" Linda Childers, April 17, 2013
]]>Foreclosure numbers for March in Michigan were recently released. There were half as many foreclosures this March as there were in March of last year. Additionally, the state saw close to a 33 percent drop from February to March. And while some may see these numbers as reason for celebration, others say they may be deceiving.
]]> Although foreclosure numbers are down, the time it takes to complete a foreclosure is the highest it has ever been in Michigan. Because foreclosure cases here are not heard by a judge, it often takes longer for them to be processed. Currently, the average foreclosure takes 477 days to complete. This is 63 days longer than the end of 2012.Facing foreclosure is a frightening experience. For many people a home is more than just a place to sleep at night. Many families have built traditions and memories in a home that they would be devastated to lose. Fortunately, there are ways to fend off foreclosure.
First, some lenders are being more lenient with offering mortgage modifications, so that may be an option for some people. Others who are less attached to their homes may find that a short sale is a better option for them. Finally, filing for bankruptcy is a good option when you are completely overwhelmed with debt.
Source: The Detroit News, "Michigan foreclosures dive in March," Brian J. O'Connor, April 11, 2013
]]>In 2008, at the height of the recession, credit card debt was particularly high. Since then, it has declined significantly. Last month, consumers increased their credit card debt by only $106.1 million.
]]> People have been reluctant to use their credit cards. In addition to the lessons learned during the Great Recession, the tax hike at the beginning of the year has translated into less take-home pay. With the Social Security tax increase, people making $50,000 will see about $1,000 less in their bank accounts.While people aren't using their credit cards as much, consumer debt has risen in other areas. Student loan debt and auto loan debt increased by about $16 billion in January.
Despite the decline in overall credit card debt, a lot of people are struggling with unmanageable amounts of debt. Ann Arbor residents who have struggled with debt in the past know how stressful that can be.
People with significant credit card debt may have legal options to pursue. A Chapter 7 or Chapter 13 bankruptcy filing may help them get their finances back in order.
A person's financial health can have a significant impact on an individual's overall well-being. Rather than continuing to stress over high amounts of debt, people in Michigan would be wise to learn about the potential legal options available to them.
Source: U.S. News and World Report, "US consumer debt up $16.2 billion in January," Martin Crutsinger, March 7, 2013
]]>Thankfully, there is a way that bankruptcy can help you regain your financial footing when your student loan debt becomes overwhelming. If your total debt has become insurmountable, freeing up your income by alleviating other debt through bankruptcy may be an excellent option. This reallocation of resources may then make your student loan payments more manageable.
]]> In late 2012, eleven percent of student loan balances were more than 90 days past due. If you are behind on this kind of debt, you are absolutely not alone. But because you cannot generally wipe student loan debt out through bankruptcy, you will need to find creative ways to make that debt manageable. Filing for bankruptcy on other kinds of debt may help enable you to make your student loan payments on time.When loan consolidations and modifications prove to be insufficient for your situation, please consider consulting an experienced bankruptcy attorney about your student loan debt. Just as the recession hit Americans hard across the board, student loan debt is now overwhelming former graduates in significant numbers. If your debt has become unmanageable, take heart in the fact that you are not alone and that solutions are likely available to aid you in regaining your financial footing.
Source: CBS MoneyWatch, "Student loan debt nears $1 trillion: Is it the new subprime?" Jill Schlesinger, Nov. 28, 2012
]]>Understand that after several years, the consequences of bankruptcy will fade from your credit report, provided that you have not done further damage to it as a result of other debt-related issues. However, many Americans recovering from bankruptcy understandably desire to pursue a new mortgage loan in between the time that they file for bankruptcy and the time during which their past debt issues no longer affect their ability to obtain credit.
]]> If you want to pursue a new mortgage loan during this period of time, understand that if you are granted a loan, the interest rates on the loan may be far higher than if you wait until your credit is more stable. In addition, it is wise to seek the counsel of an experienced attorney when you are considering a new mortgage at this time. Fees, unexpected costs and other financial consequences of signing a new loan may be buried deep within the text. An attorney can help you determine whether or not accepting the loan's terms is a positive idea at this point.Source: New York Times, "Rushing Into a Mortgage Can Prove Costly," Paul Sullivan, Jan. 18, 2013
]]>First, it is important to understand the agreements that you consent to enter into as you move forward. Credit card companies, car loan lenders and short term lenders can lock you into high interest rates with significant fees for delinquent payment. One of the best ways to improve your credit rating is to pay all of your bills on time. It is nearly impossible to pay your bills on time if you have agreed to pay creditors at rates you cannot afford.
]]> Second, it is important to work towards paying off any remaining debt you may still owe. A key factor in determining credits scores is your ratio of debt to available credit. If you have maxed out all of your available credit, your score will suffer even if you are paying all your creditors on time.If you take care to improve your credit score, you will be in a better position to receive credit at low interest rates in the future. With time and effort, positive credit can be an unexpected bright side of filing for bankruptcy.
Source: Creditcards.com, "7 building blocks of good credit," Jodi Helmer
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