Michigan Debt Relief
Great Lakes State Offers for Debt Relief

Michigan debt relief allows residents of the state the opportunity to eliminate or reduce the amount of money they owe on bills, loans and other debts.

This comes as a financial stress reliever for many people in one of the state’s that suffered the most in our country's latest economic crisis, largely because of the closing of numerous automobile plants that led to the layoff of thousands of workers around the state. The loss of jobs and continuously rising living costs make debt relief more than appealing to these Midwestern locals.

Michigan may have different laws than other states regarding debt reduction and relief, the options for overcoming this challenge remain the same here and throughout the country. Michigan residents have the option to file either Chapter 7 or 13 bankruptcies, negotiate their debt or consolidate the money they owe into a single payment using a variety of means.

Michigan Debt Relief—The Bankruptcy Option

Filing bankruptcy allows a person to start over, regain piece of mind and obtain relief from harassing phone calls and letters by authority of a court judgment. It can immediately stop foreclosure, repossession and wage garnishment, buying you time to save money, look for a job or find a new place to live.

Chapter 7 and Chapter 13 bankruptcy each provide the benefits previously mentioned—but there are some important differences. Despite the new bankruptcy laws, Chapter 7 is still the simpler and more popular of the two types of bankruptcy, which makes sense since it erases most, if not all, of a Michigan resident’s debt. If your debt exceeds your income, it is usually best to file Chapter 7 although everyone's situation and needs are different. It is advisable that you retain the services of a Michigan lawyer to investigate all options related to a bankruptcy filing.

While bankruptcy may eliminate debt it is important to know that the possibility of losing assets is very real. For instance, if you have a vacation home or two cars that are completely paid off the court can decide to seize those assets to pay back some of the debt that is discharged. Michigan law offers a married couple up to $42,000 in home equity protection while an individual may get up to $31,900 protected.

When you have an excess of disposable income or assets that you want to protect it is better for those seeking Michigan debt relief to file for Chapter 13. Under the laws of Chapter 13 bankruptcy, you are able to keep your assets and make payments over time. The payments are lower than what you currently pay and the balance is usually reduced by the amount of interest, penalties and fees. Sometimes a portion of the principal can also be eliminated by the court as well. Once you complete the payment plan, any remaining unsecured debt may be eliminated.

In the state of Michigan, if you have more than $336,900 in unsecured debt or an amount greater than $1,010,650 in secured debt you cannot file a Chapter 13 bankruptcy.

Michigan Debt Relief— The Debt Consolidation Option

For those that are opposed to filing bankruptcy, for whatever reason, there is the alternative of consolidating debt. This method of Michigan debt relief requires the money owed to be negotiated until a settlement amount is agreed upon. Lawyers do not typically handle debt consolidation; instead, a private company would work for a client to reduce the amount of funds due. Like bankruptcy, these services come with a cost and companies should be researched for legitimacy and reputation.

Depending on how much money you owe, paying the fees charged by a debt consolidation company may defeat the purpose of consolidating your debt in the first place because of the possible increase in interest or even add-ons to the outstanding principal balance. On the other hand, if you owe a lot of money, which is often the case, it would make sense to pay a reasonable fee to eliminate larger costs stemming from years of interest payments, penalties and fees. The only way to know this for sure is to do the math and go with the less expensive option.

Some people may prefer not to pay any fees and feel confident in handling debt on their own. In these instances, direct communication with bill collectors will be necessary to negotiate reductions or settlement offers.

Michigan Debt Relief Laws

Doing some of your own investigation of Michigan laws covering issues of debt relief will turn up good tidbits of information that may apply to your specific situation and help you to determine the best course of action. For instance, it might be helpful to know that a salary garnishment may not exceed 25% of your paycheck for someone who is not the head of household.

You should also note that the statute of limitations in Michigan for filing bankruptcy because of a delinquent credit card is only three years. If you wait longer you have to pay the outstanding balance or face more severe penalties. Further research will turn up interesting bits like the fact that assets such as an annuity or burial plot are exempt from being taken from your during a bankruptcy proceeding.

Michigan debt relief offers its residents a lot of protection beyond the federal code and tries to provide the best solution to eliminating expenses so that people can enjoy a better quality of life by obtaining a fresh financial start.