The First Step to Digging out of Your Financial Nightmare

When it becomes impossible to dig out of personal debt, sometimes the best and only way out is to declare bankruptcy. If you find yourself in financial quicksand, sinking lower and lower into debt each month, the best and first thing you should do is speak with Upper Peninsula Bankruptcy Lawyers Church and Korhonen, PC at (800)758-5611 as soon as possible. All consultations are free and confidential.

When personal debt becomes too much to bear it is wise to seek help and legal guidance before making any drastic decisions. Often people are too embarrassed by their situation to ask for help, feeling they alone are responsible for the situation and that they will be judged if they seek help.

It is important for you to understand you are not alone. Millions of Americans are still struggling with debt they incurred during the Great Recession. And, a consultation with a bankruptcy attorney at Church and Korhonen, PC is free and confidential. You will not be judged. You will be educated about your options so that you can make an informed decision about the best course of action for your situation.

The most common mistake people make is trying to solve their financial problems on their own.

Many people try to do the right thing, thinking they can pull themselves out of their financial troubles. Often, this is simply not the case. And in many cases, the steps they take to help the situation only make it worse.

For example, people often turn to payday loans thinking they will be a quick fix for their financial problems. Unfortunately, payday loans can become an expensive trap if you don’t pay off the entire balance along with the requisite fees when the loan becomes due.

Michigan regulations concerning payday loans are listed here along with contact information should you need to file a complaint against a payday loan provider:

These short term fixes may lead to long term problems, propelling your financial uncertainty into a death spiral.

Currently, there is a limit to how much money you can borrow at one time but there’s no limit to how many place you can go for a loan.

Trying to get out from under those loans can be difficult, if not impossible.

Before taking out a payday loan, seek professional advice from a bankruptcy lawyer. Even if bankruptcy is not an option, a competent lawyer will be able to advise you about other options.

Also beware of companies that offer quick fixes for your money troubles. Debt consolidation companies often troll for clients on late night infomercials. Many times those companies are located in a different state and are not regulated by Michigan law. Chances are they are not going to have Michigan residents’ best interest in mind and will make promises or assurances that are too good to be true. Remember, if something sounds too good to be true, it’s probably just that: too good to be true.

Many companies offering short term loans or debt consolidation services are for profit businesses looking for ways to make profit off of you. Be sure to research any quick fix you are considering before sending one dime of your hard-earned money to anyone.

If you are struggling to pay back bills, a bankruptcy lawyer will help you decide if you qualify for Chapter 7 which will provide you a fresh financial start or Chapter 13 which is a true debt capping and consolidation tool supported by the law.

According to Michigan bankruptcy law, a Chapter 13 bankruptcy is the only choice if you are behind on your mortgage and you want to keep your property, at the end of the bankruptcy process. Or, if you have previously filed a Chapter 7 bankruptcy anytime in the past 8 years.

Then of course, there are student loans.

With the cost of higher education ever increasing, many Americans are finding themselves burdened with student loan debt. A recent estimate shows roughly 40 million Americans hold over $1.2 trillion in educational debt, and many are struggling to pay.

Since students loans are generally not dischargeable in bankruptcy it is important to stay in contact with your lender, and know what options are out there for your specific circumstances.

If you hold a federal student loan, you can look into deferring payments. Other options include Income-Based Repayment and Pay As You Earn which cap your monthly payments at a reasonable percentage of your income each year, and forgive any debt remaining after no more than 25 years (depending on the plan) of affordable payments.

Forgiveness may be available after just 10 years of these payments for borrowers in the public and nonprofit sectors

It’s not wise to sit back and ignore your student loans since unpaid student loans can affect your Social Security down the road.

Generally, social security income is considered judgment proof and typical creditors cannot seize your Social Security Income. However, non-dischargable debt like student loans, unpaid taxes and back child support can be seized from your Social Security payments.

The best course of action with student loans is to work closely with the lender to pay down the amount. Although it is possible, in rare cases, to have student loans discharged in a bankruptcy, it is a difficult and expensive process that exceeds the scope of a typical bankruptcy.

The take home message for everyone suffering from financial stress is to seek the opinion of an experienced bankruptcy attorney BEFORE you decide on a course of action. Consulting with an Upper Peninsula Bankruptcy Lawyer at Church and Korhonen, PC is a free and confidential service that will likely provide useful information and hope. Call before you take matters into your own hands. (800) 758-5611 or in Marquette, MI (906)226-0001.