Many Michigan residents have always viewed bankruptcy as a last resort, a step only meant to be taken when no other options remain to clear up a bleak financial landscape. In the past, a number of those who filed for bankruptcy were perceived as having spent more than they could afford on frivolous and unnecessary items. Over the past few years, however, that perception has faded as the harsh reality of the current economic crisis has hit many Americans hard. It’s fair to say that now, a significant amount of those who file for Chapter 13 bankruptcy do so because they really do have no other choice.
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