Recent Study Found that One Third of All Michigan Families are Experiencing Debt Collection
According to a recent study of more than 7 million American's by the Urban Institute, Michigan is ranked in the lowest bracket nationally for average debt load - great news, right?
- Average debt load in Michigan per household is $43,377 vs. the highest state, Virginia, with an average debt load of $74,279 per household.
While it is wonderful that we Michigander's, on average, have less debt, Michigan unfortunately is still in the mid-bracket for debt collection (at 34.7%) and just below the national average of 35.1%. This means that while there is less debt to collect in Michigan, creditors are more aggressively targeting people in our state vs. people in other states who may actually carry more debt.
- Virginia is only at 31.7% average collection rate against its citizens even though they have on average 42% more debt!
Living with debt collections can be challenging - not only can debt begin to snowball with added interest and late fee charges, but debt collectors can be ruthless in their attempts get paid. Our Michigan law firm advocates for one thing - debt resolution! This can come in many forms: debt settlement, debt consolidation, bankruptcy debt relief, etc. The important word is resolution! Living with debt collectors harassing you or worse, garnishing your bank account or wages, can create chaos and add additional stress in your life. To help reduce this stress and anxiety, our firm offers everyone a free consultation with a licensed debt relief attorney to:
- Review your personal circumstances;
- Discuss all available options and;
- Develop a personalized action plan to best resolve your debt!
Call us today at 866-261-8282 to speak with an attorney or schedule an appointment online. For convenience, we offer six Michigan locations in: Detroit, Ann Arbor, Dearborn, Southfield, Warren or Flint. Here is an overview of your debt resolution options:
Debt Settlementis a great consideration when you have:
- Limited amount of creditors;
- A lump sum of cash saved to apply to a one-time payment to resolve the debt;
- No pending legal actions, such as a judgment or garnishment that may shift the bargaining power to your creditor(s).
We can evaluate if you are a good candidate to try settling your debts. It is important to make sure the debt is legally released and the unpaid portion will not get sold to a third party debt collector. Trust our experience to negotiate the best settlement and ensure a legally binding resolution to move your credit in the right direction.
Debt Management or Debt Consolidation through Chapter 13 Bankruptcy:
Debt consolidation is a process combining multiple bills into a single payment. There are many non-profit agencies that provide this type of service, but buyers beware. While there are many good and reputable agencies that put their clients' needs before the creditors, there are just as many, if not more, that do the opposite - put the creditor's interest ahead of the individuals. Many "non-profit" debt relief agencies are paid by visa and mastercard to consolidate an individuals debts into one monthly payment - all for the benefit of visa and mastercard. For an in-depth look at the "Debt Management Programs" versus Chapter 13 debt consolidation, visit our webpage dedicated to this topic. Chapter 13 bankruptcyis a legal means to consolidate and reduce your debt with the security of court oversight and protection. The benefits of a Chapter 13 bankruptcy are numerous, but here are several highlights:
- 0% interest repayment for all unsecured creditors: This includes credit cards, medical bills, personal loans, deficiency debt and old utility bills. We don't have to negotiate individually and hope for your creditor's cooperation, as this is a guaranteed aspect of the consolidation program.
- Payment transparency: Under the Chapter 13 plan, all payments are collected by a court appointed Trustee and you can view all disbursements online so you know exactly where your money is being allocated.
- Debt Reduction: Under the Chapter 13 plan we are able to reduce your debts based on your budget and ability to repay, such as:
- Unsecured debts, such as credit cards, medical bills, personal loans, old utilities, loan deficiency debt, etc;
- Remove a second mortgage or home equity loan;
- Decrease interest rates and possibly reduce the amount owed on vehicle loans, depending on length of ownership;
- Options to pursue a loan modification on a home mortgage to seek better terms.
4. Credit repair: The Chapter 13 is designed to help you improve your credit score by:
- Reducing principal debt to improve your debt-to-income ratio;
- Restoring timely payments to your creditors to improve payment history and avoid late reports to the credit bureaus;
- The above two factors influence 65% or more of your credit score!
5. Creditor hierarchy: The Chapter 13 plan provides a structured repayment process based on highest priority. Rest assured that the most important bills, i.e. your mortgage, car payment, living expenses, etc. are prioritized and paid before your unsecured creditors receive any payments. A Chapter 13 bankruptcy is a customized repayment plan. To understand how it might work for your circumstances, please contact us at 866-261-8282for a free consultation.
Debt Elimination through Chapter 7 Bankruptcy:
By filing for Chapter 7 bankruptcy, you can remove all general unsecured debts from your credit. This virtually wipes the credit slate clean and allows you to make a fresh start. Debts that are legally discharged through the Chapter 7 process are:
- Credit Cards;
- Medical Bills;
- Old Utility Bills;
- Loan deficiency debt (such as old repossessions or mortgage debt);
- Personal loans, etc.
If you don't have the income to attempt repayment terms with your creditors, Chapter 7 is the most efficient way to get back on your feet and get creditors off of your back. We can determine if you qualify for Chapter 7 debt elimination when you come into the office for a free consultation.
Putting off Collections Will Not Solve the Problem, It Will Only Delay the problem
Debt collectors can be ruthless in their efforts to get your money. Their tactics can include judgments and garnishments. These will further mar your credit and can devastate your financial stability if money is unexpectedly taken from your paycheck or bank account. Find lasting debt resolution with the solution that best fits your circumstances and long term goals. Call Acclaim Legal Services at 866-261-8282 to meet with a licensed Michigan attorney to discuss your situation and best options to get out of debt. FOOTNOTE from Urban Institute; 1 - Debt in collections: Debt goes into collections after it is more than 180 days past due. At that point, the debt is placed in collections by the original issuer or sold to a third party debt collector. Debt in collections can remain on a person's credit file for up to seven years.