When debt continues to pile up and options are running out, the last resort is often a scary one for many Michigan residents. However, sometimes filing for bankruptcy is the only solution for some individuals to get out of debt. Personal bankruptcy is a process that provides debt relief and can eventually give you a new slate to work with.
When making the decision to file for bankruptcy in Michigan, one must decide which form of bankruptcy is right for them. Chapter 7 bankruptcy is common for those with limited assets who are 100 percent unable to pay back debt on their own. Chapter 13 bankruptcy on the other hand, is for those that are looking to maintain most of their assets and want to simply re-establish themselves with their creditors by creating a more affordable, court-approved repayment plan.
After the bankruptcy process is complete rebuilding credit should be your main priority. Everyone in this situation would do well to keep in mind that there is no overnight fix and one's credit score isn't going to jump 200 points over a day or two. It takes time to re-establish credit history. Secured credit cards are a great starting point, as they work with money that you deposit onto the card but credit and timely payments are still reported to the credit bureaus.
It is also beneficial to monitor your credit report after filing for bankruptcy to ensure all discharged debts are accurately reflected and to monitor the rebuilding of your credit score. It won't happen overnight, but in time with hard work and diligence on your part you can begin to rebuild you credit score and gain the trust of lenders again.
Source: San Francisco Chronicle, "How To Survive Bankruptcy," Angie Mohr, May 9, 2012