The United States Federal Reserve reported relatively recently that the country, including Michigan, is experiencing an uptick in borrowing by everyday consumers. While some could see this as a positive sign, especially in light of thinning unemployment lines, more consumer debt will naturally present some potential challenges to the public.
Michigan residents who follow this blog may have noticed that some posts refer to an "automatic stay" that people receive upon filing for bankruptcy. While those who read this blog regularly or who otherwise have some familiarity with the bankruptcy system may have some idea of what this automatic stay entails and why it is important for a person in financial distress to get, and keep, his or her automatic stay.
The last several posts on this blog have discussed how filing a Chapter 13 bankruptcy can be advantageous to some Michigan residents who are struggling with debt. While the decision to file a Chapter 13 as opposed to a more common Chapter 7 bankruptcy of course depends on a debtor's individual situation, a Michigan resident who is contemplating whether or not to file Chapter 13 may want to be mindful of what his or her obligations will be throughout the three to five year process.
As many Michigan residents know, one of the contributing factors to the Great Recession was the "subprime" home mortgage market, through which many people received house loans that they could not afford. The end result of these liberal lending practices was a disaster both for investors who no could no longer count on receiving their expected loan payments and, especially, for average homeowners who lost their dreams to foreclosure.
Many Michigan residents have probably already heard that filing for bankruptcy will not protect a person from having to repay student loans in full. With few exceptions, a bankruptcy discharge will not apply to student loan debt.
Many Michigan residents, and particularly those who know people who have been through the process before, may think that filing for bankruptcy is a relatively straightforward matter that can be handled without the assistance of an attorney. While this may be true in some cases, people really should think twice in light of the following story from another state.
According to a recent report, a number of people in the so-called "Millennial" generation, born between 1979 and 1996, are doing a good job of saving money for retirement. According to this report, over two-thirds of young adult Millennials are saving something for retirement, usually at an age well earlier than that at which their parents started to put money away for their golden years.
Many Michigan residents have taken much pain to save some of their paychecks regularly, and put this savings into an Individual Retirement Account (IRA) or other type of savings plan. Although many of these Michiganders probably use the funds in this account when they are finally able to retire, others may wind up passing on their IRA to their loved ones via a beneficiary designation or other type of inheritance.
Debt is an issue that affects the majority of Americans, and it carries with it a degree of shame in a social context. Strangely, Michigan residents who choose to deal with their debt issues by filing for Chapter 7 bankruptcy are also affected by this shame, because it is perceived that a bankruptcy filing is a negative thing. While it presents a number of unique challenges, a bankruptcy filing can actually be beneficial to a financial future in the long run.