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Struggling consumers may find relief in Chapter 7

For many Michigan consumers, making ends meet is more difficult now than ever before. Many engage in a delicate balancing act each and every month, as they try to gauge which bills must be paid now and which can wait a few more weeks in an effort to stave off a Chapter 7 bankruptcy filing. Inevitably, those calculations fail, at least every now and again. The result is often a bounced check, which can lead to a chain of events involving debt collectors and aggressive collection efforts.

In some cases, individuals who have bounced a check begin receiving letters in the mail that bear the letterhead of the state's District Attorney's office. The contents of these letters come as a shock to many, and can include threats of arrest and jail time if the debt is not immediately paid. Making matters worse, the amount now due can be nearly double the original amount of the check, and can include a variety of fines and fees.

Not knowing where to turn for help and in fear of arrest, many consumers find a way to pay the debt, often at the expense of covering other, current bills. However, it is important to understand that in most cases, the entity issuing the threatening letters is not in fact the Attorney General's office, but is a company hired to collect on bad checks by giving the appearance of working under the Attorney General. This tactic is completely legal, although could certainly be called ethically questionable.

For many Michigan consumers, the threat of legal action is the final straw, and leads to a serious search for relief from debt collectors. One option that will immediately stop collections efforts involves filing for Chapter 7 bankruptcy. While bankruptcy is no one's first choice in addressing outstanding debt, in certain cases it is the most financially responsible decision, and can lead to a future in which finances are much more stable.

Source: LA Weekly, "How Debt Collectors Get Away With Terrorizing Consumers -- With the Blessing of Public Officials," Denise Grollmus, Jan. 24, 2013

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