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Michigan Debt Negotiation and Bankruptcy

Debt Negotiation

Debt negotiation can be an effective way to settle debts owed to “unsecured” creditors

without filing for bankruptcy.  Some examples of unsecured debts are:

  • Credit Cards
  • Department Store Credit Cards
  • Medical or Hospital Bills
  • Personal Loans (unsecured signature loans with no collateral)
  • Back Rent of Previous Residence
  • Auto Loans (from repossessed vehicles)
  • Debt to Local Merchants
  • Past Due Utility Bills (from previous residence)

​If you are only a month or two behind, it is not the right time to begin negotiations with creditors. Negotiations are most effective when payments are delinquent three months or longer. Speak with an attorney at Bommarito Law today to discuss your financial situation and determine if debt negotiation is right for you.

Michigan Bankruptcy

Bommarito Law offers clients the ability to file for Chapter 7 bankruptcy, which will wipe out your debts and get a “fresh start.”  Chapter 7 bankruptcy is a liquidation where the trustee collects all of your assets and sells any assets which are not exempt.  The trustee sells the assets and pays you, the debtor, any amount exempted. The net proceeds of the liquidation are then distributed to your creditors with a commission taken by the trustee overseeing the distribution.

Certain debts cannot be discharged in a Chapter 7 bankruptcy, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged.   In most Chapter 7 cases, the debtor has large credit card debt and other unsecured bills and very few assets. In the vast majority of cases, a Chapter 7 bankruptcy is able to completely eliminate all of these debts.

You may keep certain secured debts such as your car or your furniture or house by reaffirming those debts. To do so, you must sign a voluntary Reaffirmation Agreement.  If you decide that you want to keep your house or your car or your furniture, and you reaffirm the debt, you cannot bankrupt (or wipe-out) that debt again for eight years. You will still owe that debt and you must continue to pay it just as you were obligated to continue to pay it before you filed bankruptcy.   Further, in order to reaffirm the debt, you must also bring it current.  In other words, if you are three or four months behind, then you must pay the back payments which are due in order to reaffirm it. You can selectively reaffirm your debts-- for example, you may wish to reaffirm and keep the house and the furniture, while the car and the jewelry to go back to the respective Creditors.

Speak with a  Bankruptcy Attorney Today

Bommarito Law can provide you with the tools to file for a Chapter 7 bankruptcy and get a fresh start.  Speak with an attorney today to discuss your financial situation and determine if bankruptcy is right for you.