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bankruptcy Archives

The downsides of debt consolidation

Michigan residents may believe that a debt consolidation loan may be the answer to their debt issues. However, this is not always the case, and it is possible that debtors may find themselves even deeper in debt after consolidating. This is because consolidating existing debt doesn't address the issue of why a person spent too much money to begin with.

Bankruptcy trustee claims debtor abused the process

Michigan residents who file for bankruptcy can expect to have their finances scrutinized. In a Virginia case of a man who filed for Chapter 7 protection and had two homes, the bankruptcy court found that he had not abused the system despite a challenge from the trustee overseeing his debt discharge.

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.

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.

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.

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.

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.

How tax refunds increase the likelihood of bankruptcy

According to the IRS, the average tax refund for Michigan residents and other Americans in 2016 was $2,860. While some will use that money to take a vacation or make other large purchases, others will use the money to file for bankruptcy. According to the Administrative Office of the U.S. Courts, bankruptcy filings in March between 2013 and 2016 were 26 to 34 percent higher than the monthly average for the year.

Retirement savings in Chapter 13 bankruptcy plans

One of the duties of bankruptcy judges in Michigan and around the country is evaluating the repayment plans submitted by Chapter 13 petitioners. Individuals or couples who file Chapter 13 bankruptcies are expected to use most of what they earn to pay down their outstanding debts over a period of three to five years, and judges may reject proposals that devote large amounts of their disposable income elsewhere. Exceptions may be made to allow debtors to continue to fund their retirement accounts, but this does not mean that they will be able to save as much as they once did.

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