In Michigan, creditors have up to 6 years to collect credit card debt or to obtain a judgment on it. Michigan residents might find this information useful, as credit card delinquencies have reached an all-time high across the country.
Federal Reserve Bank data
The Federal Reserve Bank of Philadelphia reports that high-interest rates and inflation are making it difficult for Americans to pay monthly credit card bills. According to the report, the percentage of credit card bills that are 30 or 60 days late is the highest it’s been since 2012.
Credit card debt and delinquency rates are affecting banks as well. More banks are starting to deny credit card line increases and reduce existing credit card lines.
Bankruptcy and debt
Overwhelming debt is one of the top 7 reasons why people file for bankruptcy. Filing can eliminate some types of debt, including credit card debt. Bankruptcy can also stop most lawsuits, wage garnishments and other collection activities.
Some debts are exempt from bankruptcy. For example, student loans remain due unless there’s a case of undue hardship. Bankruptcy also can’t eliminate child support, alimony, or some tax debts.
Considering bankruptcy
Most people who file for bankruptcy do so after exhausting their other options. While filing can relieve the burden of debt, there are some things to consider. For example, a Chapter 7 bankruptcy remains on a credit report for 10- years and Chapter 13 remains on a credit report for 7-years.
Anyone considering filing bankruptcy will have to weigh the pros and cons. It may or may not provide the best solution to debt problems. But the relief of getting rid of overwhelming debt is possibly worth the effort.
