In 2017, roughly 700,000 Americans filed for bankruptcy -- some of whom were Michigan residents. They did this because they found themselves in difficult financial positions that left them feeling that they had no other option, and that is okay. However, before utilizing bankruptcy law benefits, one must think long term.
There are numerous benefits to filing for bankruptcy. Depending on the type of filing one pursues, one's debts may be immediately discharged or an affordable payment schedule may be created. Creditors will be forced to stop demanding payments; the foreclosure process can be stopped; and one can finally achieve some sense of monetary relief -- among other benefits.
There are downsides to filing for bankruptcy as well -- the biggest being that it can affect one's credit rating for quite a while. Those who have low credit scores may find it difficult to obtain loans or loans with decent interests rates. In fact, people who have been through bankruptcy often end up paying hundreds to thousands more in interest than individuals who have not utilized this debt relief strategy.
There are certainly times when bankruptcy is the only option. Before taking such a step, it is best to get advice on the matter so an informed decision can be made. Michigan residents can turn to a bankruptcy law attorney who will be able to review their financial situations and help them decide if bankruptcy is the right choice for them -- in both the short and long term. Further assistance can then be provided in pursuing the debt relief option that is thought best.
Source: fool.com, "Here's How Much Borrowers Pay on Loans After a Bankruptcy", Chris Neiger, April 21, 2018