Debt is not uncommon in Michigan, from mortgages to car loans to credit card debt. While some debtors can meet their financial obligations and pay down the debt, there are times when you can feel overwhelmed because of situations outside your control. These are the times you may want to consider filing for bankruptcy.
According to Debt.org, medical debt and job loss are two of the most common reasons that Americans file for bankruptcy. You cannot control if you are laid off or if you are injured or sick, so there may be times when you have overwhelming bills you cannot pay. Medical problems make it hard to get to work and it can be hard to find a new job after you are let go. Some find themselves in a situation where they lose their jobs at the same time expenses go up.
If you are in any of the following six situations, it may be a good idea to consider bankruptcy:
- Your marriage is ending
- You are being sued by creditors for payment of your debts
- Your home is in danger of foreclosure or underwater
- You are using a credit card to pay for most things
- You must use one credit card to pay off another
- You may have to withdraw money from your retirement account to pay your bills
The two major forms of bankruptcy are Chapter 13 and Chapter 7. Chapter 13 is ideal for those who have a steady income and a certain amount of secured and unsecured debts. There are income requirements you must meet to file for Chapter 7 bankruptcy, but your debts are discharged quickly, and you get your fresh start almost immediately.
This information is for educational purposes and should not be interpreted as legal advice.