In Saginaw County, 32% of homes have at least one debt in collections. Medical bills are the leading cause of debt collection, accounting for 16% of cases. Student loan defaulters make up 13% of borrowers who are in default. Keep that in mind the next time you cringe when you see a past-due note or a debt collector tries to shame you on the phone because you aren't alone. According to statistics, one out of three people living near you has similar difficulties.

Debt that is late or in default can carry a slew of unpleasant consequences, some of which you are likely aware of and others about which you may not be so conscious. There's the potential for your credit report and score to suffer, as well as the associated expenses and restrictions when you make these changes. When you get back on track with your debt, your credit might prevent you from renting an apartment. Bad Credit Can Affect Your Ability To Rent An Apartment

Debt collectors, creditors, and debt buyers file about five million debt collection cases in the United States each year. A judgment in a debt collection case may result in wage garnishment, bank account sequestration, and other collection measures such as vehicle repossession. For someone who is already financially challenged, a wage garnishment order or the loss of funds in their bank account might be the last straw.

Types of Debt

Unsecured and secured debt are two major categories of debt. In bankruptcy situations, these two sorts of debt are treated differently.

Unsecured Debt

The majority of consumer debt is unsecured, which implies there is no property to secure the debt. Unsecured loans include the following:

  • Credit card debt
  • Unpaid rent and utilities
  • Medical bills
  • Personal loans not secured by collateral
  • Payday loans

Secured Debt

Secured debt is debt that is backed by collateral. The lender can seize the property that serves as security if you fail to pay the secured obligation on time. Auto loans and house loans are the two most prevalent types of secured debts.

Other types of loans may be secured, as well. For example, a personal loan from your bank might be secured with a Certificate of Deposit you have with the bank. Or, you may have gone to a storefront loan shop and pledged your television and game system as collateral for a small personal loan. Often, when a lender takes property that serves as collateral and sells it, the sale does not generate enough to pay back the loan in full, plus the costs of the sale. When that happens, the lender may be able to pursue you for the remaining balance. The leftover debt is unsecured since the collateral is gone, but the lender may still pursue other collection actions. 

Debt Solutions for Midland Residents 

Most people who eventually file for bankruptcy have been struggling with debt for two to five years--some even longer. 

The most common debt solutions are:

  • Negotiating directly with creditors and debt collectors
  • Debt settlement programs
  • Debt management plans
  • Loan consolidation
  • Bankruptcy 

Determining if Bankruptcy is Right for You 

The U.S. Bankruptcy Code offers a variety of options for people and businesses in debt trouble. The two types of bankruptcy most commonly used by individuals and married couples are Chapter 7 and Chapter 13. 

When debt overwhelms a person or business, the bankruptcy law was created to assist them and firms to recover financially. A fresh start in bankruptcy frees up that money for the individual or couple to spend as they choose. While this should imply savings, financial planning for retirement, and other efforts to stabilize finances, it frequently also implies more access to consumer goods, trips away from home, eating out, automobile purchases, and real estate purchases.

Chapter 7 and Chapter 13 bankruptcy represent two very distinct paths for individuals in various situations. The greatest method to determine whether bankruptcy is the right option for you and which kind of bankruptcy would be the best fit is to consult with a local Michigan bankruptcy lawyer.

The Best Bankruptcy Attorney in Midland, MI

If you're considering bankruptcy because of financial problems, you undoubtedly have a lot of questions. Reinert & Reinert's experienced bankruptcy attorneys prioritize making sure that you understand your choices and are comfortable with your rights. We'll make sure you know what to expect. We'll work with you to determine which type of bankruptcy is the most suitable option for you and meets your demands.

 Contact us to schedule a free consultation with one of our lawyers in person, over the phone, or via Zoom, and join the 13,000 clients that we have helped achieve a debt-free life. 

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Reinert & Reinert

3434 Davenport Ave.
Saginaw, MI 48602

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