Most people see a stigma attached to filing for bankruptcy. But this process has far more benefits than disadvantages to people who want to get out of debt and improve their financial decisions. The following are the best-known results of filing for bankruptcy in Michigan:
Keep your belongings
A myth is that filing for bankruptcy means losing all of your personal belongings. You risk losing your house, car, business, and bank accounts. This is not true because of a legal action known as an automatic stay.
The automatic stay is an immediate delay in the foreclosure of your property and the repossession of your assets. However, creditors can file a motion to block or remove the automatic stay.
Stop collection efforts
An automatic stay prevents creditors from contacting you by email, phone, or mail. They are not allowed to attempt to collect payments from you anymore. If they do, you have the right to fight back in court and receive compensation.
Filing for bankruptcy is one of the most affordable ways to pay off debts that have become unmanageable. Create a new payment plan that allows you to increase your savings every month, which includes increasing retirement savings. You can ask the court to modify this payment plan at any time.
The benefits of filing
Bankruptcy allows you to reevaluate your finances and develop a new debt payment plan. There are numerous other benefits, from preventing foreclosure to discharging certain debts, that are worth considering. If the process is finished successfully, most people are no longer debtors and are on their way to becoming financially stable.