Americans are feeling the pain at the pumps and in their pockets, which makes considering bankruptcy a serious discussion for many Michigan families. Consumer bankruptcy is a way that some people can deal with their debt.
Knowing when to declare bankruptcy or find another way to lighten your debt is a significant first step. Consider the long-term damaging effects to your credit report and which type of bankruptcy fits your situation before filing. Bankruptcy relief eliminates or reduces most debts but comes with other important considerations.
What debts are included in consumer bankruptcy?
The two types of consumer bankruptcy are Chapter 7 and Chapter 13. The former remains on your credit reports for 10 years and the latter for seven years. Discussing your debt with your creditors to see if you can work out a better repayment plan with less impact on your credit score can lessen the need to file bankruptcy.
In most cases, your home, auto and credit card debt can be included in consumer bankruptcy. Court-ordered eviction stays are usually temporary, with a limited time allowing you to remove your things from the apartment before the stay is lifted and your landlord can have you evicted.
Consumer bankruptcy orders a stay of protection against creditor actions, but it has some limits. If your landlord wants the unit back, it’s best to move, but if you agree to stay, make sure you don’t violate any of the repayment terms.
A bird’s eye view of your entire financials can help you assess the best option for lowering your debt. It’s a good idea to weigh your assets against your liabilities and then make the best decision for your financial future.