Sooner or later many Michigan families need to reach for a credit card when an unexpected expense pops up. Credit card debt has become a fact of life for many American households. The Federal Reserve reports that credit card balances nationwide exceeded $1 trillion in 2017. A senior analyst from CreditCards.com has advised consumers to work on paying off their debts in 2018 because interest rates are rising. This will add to the cost of maintaining debt and could prompt more people to fall behind on payments in the near future, he said.
In Chapter 13 bankruptcy cases, debtors have the ability to modify their mortgages in certain situations. A string of recent decisions may signal a trend that could affect the way bankruptcy courts in Michigan address these modifications. In these cases, a number of Ohio judges have issued rulings that greatly expand a debtor's access to so-called "cram down" modifications to a residential mortgage. This is a major change from the status quo.
The effect that the economy has on Michigan residents and others throughout the U.S. varies depending on the age group of the citizens. For instance, it should come as no surprise that the economic crisis of 2008 hit Millennials, who were just finishing college and getting prepared for their first job, differently than members of Generation X, who were stuck paying mortgages for a house that had devalued. Bearing that in mind, it follows that different generations will have different credit profiles with some struggling more than others.
Michigan debtors who are considering filing for Chapter 13 bankruptcy may be interested in a ruling made by a Georgia bankruptcy court. The decision marks the second time within a month that a bankruptcy court permitted a Chapter 13 debtor to include in her payment plan the payments for redeemed real property that had been sold in a tax sale.
The Federal Rules of Bankruptcy Procedure changed in a number of ways on December 1, 2017, impacting bankruptcy cases in Michigan and across the United States. The primary effects of the changes involve Chapter 13 cases where creditors have secured claims, unsecured claims or judgment liens. Broadly speaking, the changes require greater attention or action on the part of creditors in Chapter 13 cases and establish new deadlines for creditors.
Bankruptcy is a legal process that can be used to resolve overwhelming debt, and every year, 800,000 people in the United States use it to get out of debt. Michigan residents that have gone through a bankruptcy may think that buying a new home may be impossible. Although it may be a complicated process, purchasing a home after a bankruptcy is possible.
Bankruptcy laws help people reduce or eliminate their debts. Although this protection is available to all adults, Michigan seniors are a growing section of bankruptcy filers. There may be a few reasons why they're turning to the federal bankruptcy code to resolve their financial problems.
The number of bankruptcy filings fell 1.8 percent in September 2017 compared to September 2016. Overall, there were 790,830 bankruptcies filed by Michigan residents and others through Sept. 30. There were 805,580 bankruptcy cases in the prior year. According to the Administrative Office of the U.S. Courts, this was the lowest total over any 12-month period since June 2007. However, the decline in overall bankruptcies in the period between September 2016 and September 2017 was the lowest in a one-year period since 2011.
People struggling with debt may turn to avenues such as taking on a second job or bringing in a renter to help with the bills. Sometimes, these approaches pay off. Other times, though, they can be risky or unnecessary. For example, an improperly vetted renter could cause significant property damage.
If one judge had his way, Michigan residents and others would not face debt limits when filing for Chapter 13 bankruptcy. He and others shared this sentiment at an October meeting of the American Bankruptcy Institute Commission on Consumer Bankruptcy. This may help those who don't qualify for Chapter 13 bankruptcy but don't find Chapter 11 to be a realistic alternative.