The Pros and Cons of Filing Bankruptcy

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Ann Howard Law-Bankruptcy Attorney

Ann M. Howard

Practice areas

Chapter 7 bankruptcy

Chapter 13 bankruptcy

Foreclosure defense

Debt collection defense

Credit repair

Consumer law

Here are some of the pros and cons of filing bankruptcy in Michigan

Pros:

  • Stops collection efforts: Once you file for bankruptcy, creditors are prohibited from contacting you or taking any legal action against you to collect your debts. This includes wage garnishments, repossessions, and foreclosures.
  • Discharges debt: Depending on the type of bankruptcy you file, you may be able to discharge (eliminate) most or all of your debts. This includes credit card debt, medical bills, personal loans, and even some student loans.
  • Protects your assets: In most cases, you will be able to keep your property, such as your home, car, and personal belongings. However, there are some exceptions, such as luxury goods or property that is not considered essential.
  • Improves your credit score: Over time, filing for bankruptcy can help improve your credit score. This is because bankruptcy shows that you have taken steps to address your debt problems and are now working to rebuild your finances.

Cons:

  • Filing fee: There is a filing fee for bankruptcy, which can be several hundred dollars.
  • Credit report: Bankruptcy will stay on your credit report for up to 10 years. This can make it difficult to get approved for loans or credit cards in the near future.
  • Impact on employment: Some employers may discriminate against job applicants who have filed for bankruptcy.
  • Stigma: There is still a stigma associated with bankruptcy, even though it is a legal way to deal with debt problems.

Ultimately, the decision of whether or not to file for bankruptcy is a personal one. There are many factors to consider, such as your financial situation, your assets, and your future goals. If you are considering filing for bankruptcy, it is important to speak with an experienced bankruptcy attorney to get personalized advice.

Here are some additional things to keep in mind when considering bankruptcy in Michigan:

  • The Michigan exemption amount is the maximum amount of property that you can keep in bankruptcy. This amount varies depending on the type of property and your family size.
  • There are different types of bankruptcy, each with its own advantages and disadvantages. The most common types of bankruptcy in Michigan are Chapter 7 and Chapter 13.
  • The bankruptcy process can be complex and time-consuming. It is important to have an experienced bankruptcy attorney to help you through the process.

If you are struggling with debt, it is important to seek help as soon as possible. A bankruptcy attorney can help you explore all of your options and determine if bankruptcy is the right solution for you.

Resources

What is Chapter 13 Bankruptcy

What is Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a reorganization bankruptcy, which means that you create a plan to repay your debts over time. In Michigan, Chapter 13 bankruptcy is a common option for people who have a...

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What is Chapter 7 Bankruptcy

What is Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a liquidation bankruptcy, which means that your assets are sold to pay off your debts. In Michigan, Chapter 7 bankruptcy is a common option for people who have a lot of debt...

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Can I Keep my Car When I file Bankruptcy?

Can I Keep my Car When I file Bankruptcy?

The assets that are exempt from bankruptcy in Michigan are determined by the state's exemption laws. The following are some of the most common exempt assets in Michigan: Homestead exemption: Up to...

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How Do I file for Bankruptcy in Michigan?

How Do I file for Bankruptcy in Michigan?

How Do you file for Bankruptcy in Michigan? Bankruptcy is a challenging and overwhelming process, but understanding how to file is important. Read the outline below and consult an attorney before...

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Michigan Bankruptcy Step by Step

Michigan Bankruptcy Step by Step

Filing for bankruptcy can be a daunting task, but it can be a lifesaver if you are struggling with overwhelming debt. Here is a brief step-by-step guide on how to file bankruptcy in Michigan: Take a...

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