What does the law say about not paying your debt in Michigan?

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When it comes to their finances, Michigan residents have significant underlying debt problems.

On the surface, issue areas are rarely apparent since Michigan keeps debt levels lower than the national average

Michigan consumers and debt

One of the key reasons is that many Michigan consumers use bankruptcy to discharge their debts, lowering the state’s average debt levels.

Michigan law is quite extensive, going far beyond the federal government so it can protect consumers more than other states.

Michigan’s credit scores

The average credit score for Michigan is 653, which is just shy of the national average of 661.

The FICO scoring system ranges from 300 to 850, with higher numbers indicating a higher chance of paying debts on time.

Other reasons, such as high bankruptcy rates and frequent late payments, are more common in Michigan.

Is there a Michigan statute of limitations debt?

The statute of limitations for unpaid bills in Michigan is six years, regardless of the type of debt.

The debt can be personal loans, household debts, auto loans, credit card debt, payday loans, medical bills, medical emergencies, and most secured and unsecured debts.

What happens after six years of consumer debt?

The state law in Michigan implies that creditors cannot take legal action against you if a debt has been outstanding for more than six years or hasn’t been paid for more than six years.

Creditors and debt collectors are then prohibited to collect debts owed to them, but you would need to seek a court order to enforce the statute of limitations if the creditor does not comply.

What is debt collection in Michigan?

Certain types of income and property are considered exempt from debt collection under state and federal law. A creditor or debt collector cannot make you use exempt income or property to pay outstanding debt.

Debt collection may include several different types, but certain benefits cannot be collected. Amongst these are Public Assistance (PA), Social Security Income(SSI), and Social Security Disability.

Workers’ compensation, unemployment insurance, and VA benefits are also excluded.

You can work with an attorney and hire legal services (which usually include a free consultation) so debt collectors stop contacting you and you stop receiving such calls or certified mail which can even be illegal.

The Collection Practices Act

The Collection Practices Act is Michigan’s equivalent of the federal law known as the Fair Debt Collection Practices Act (FDCPA).

The state’s consumer protection statute, like the FDCPA, prohibits harassment, fraudulent, incorrect, and false statements or conduct to collect a debt.

Michigan limitations on debt collection

The limitations on debt collection in Michigan forbid debt collectors from making threats or using shaming tactics to collect debts.

The limitations Michigan faces also prohibit a debt collector from engaging in harassing, abusive, or otherwise detrimental ways to collect a debt.

Differences in federal law and state law

The most significant difference between the Michigan Collection Practices Act and the federal FDCPA is that it does not apply to credit repair.

The state’s debt collection law applies directly to lenders and creditors, whereas the national regulation only applies to outside debt collectors.

What you have to know about debt collectors in Michigan

The Fair Debt Collection Practices Act (FDCPA) classifies a debt collector as someone who regularly collects, or attempts to collect, consumer debts for another person or business, or refers to himself/herself as anything other than his/her own when collecting his/ her consumer debts.

According to numerous laws in Michigan, your creditor has up to six years from the date of your previous payment to attempt to collect a debt.

What is a judgment?

A judgment is a final order from a Court of Law that allows your creditor to pursue collections or wage garnishments as long as they re-open the judgment every ten years.

If your creditor obtains a judgment or default judgment and keeps it active by renewing it, the statute of limitations may not apply.

Third parties hired by lenders for debt collections on their behalf are known as third-party debt collectors.

Even if a debt has gone dormant for years, it may be collected again many years later or sold to a debt collector down the road.

When you sell a debt to a collection agency, the collection agency is likely to resume aggressive collections efforts to recoup its expenses.

How long can a debt collector in Michigan pursue a debt?

In the state of Michigan, a lot of consumers are struggling with outstanding debt.

When a consumer debt goes unaddressed for an extended period, creditors may file a lawsuit against the customer to get a judgment.

A judgment allows you to collect money against the debtor’s (i.e., the person who owes the debt) earnings, through methods such as wage garnishments or bank account seizures.

A lawsuit will be filed by creditors who are owed money if they claim you breached your obligations under your contracts.

In Michigan, the statute of limitations for a breach of contract is six years.

If debt collectors are harassing you, you can contact the Michigan Attorney General’s office at 877-765-8388 to make a complaint.

Another way to protect yourself from scams is to report them to the Federal Trade Commission. You can do this by going to their website or by calling them toll-free at 1-877-382-4357.

If you feel that your consumer protection rights are being violated by creditors, then you are recommended to document the contacts made by the creditor, including the person who contacted you, which company they are from, the time of the correspondence, and what was said by the debt collector.  With this information, you may be able to file a civil complaint against the creditor for violating both the federal and Michigan rules and get a judgment against them.

How can a lawyer help me get out of debt?

Both in the case of oral contracts and written contracts, it is better to hire professional legal services so you have an attorney on your side explaining the limitations and options until you are no longer legally obligated to pay.

The creditor wins the case and is awarded a judgment once that occurs. Many consumers opt to defend themselves against this.

An attorney’s legal services can help you figure out how to defend yourself against the creditor or assist you in working out a resolution with the creditor that makes sense for you.  Once you have an attorney involved the creditor understands that you may now be a viable bankruptcy candidate and may be more willing to work with you before you file bankruptcy. 

Benefits of working with an attorney

An attorney will be able to advise you of all your options to make the best decision for you and create a plan of action to get the debt relief you are seeking.

A debtor must be informed that judgments might be renewed by the collector on behalf of the debtor for an additional 10 years.

Both the Consumer Financial Protection Bureau and your lawyer are experts at finding ways to protect you as a consumer.

A lawyer can provide a precise amount of information to credit reporting agencies. They are not permitted to harass you, but they may attempt to get money from you.

Debt consolidation loans are one of the most popular methods to combine consumer debts in Michigan to get you a fresh start.

Debt consolidation loans are offered to help many people pay off their debts more quickly over time by lowering their payments and interest rates.

Benefits of consolidating loans

These loans give people a sense of security by lowering their debt levels. They also alleviate the worry of losing their house or car because of unmanageable auto loans, credit card bills, or medical expenses.

This consolidation can be the best course to cut your monthly payments and interest rates in a new contract.

Remember that if you have a legal contract with a creditor to whom you owe money in Michigan, you are required to pay it.

Learn how to deal with unprofessional debt collectors and your rights as a debtor.

The Babi Legal Group can assist you in finding better ways to deal with debt, credit, and payment.

 

Can an attorney stop foreclosure in Michigan?

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When you’re facing a foreclosure, it may be difficult to know how to proceed and what options are available.

Foreclosure is the process in which a lender forecloses on a property after someone fails to pay their loan.

How does foreclosure begin in Michigan?

In Michigan, most foreclosures are done without the need for court involvement, This is known as foreclosure by advertisement.
When your lender informs you that it will foreclose upon your property due to your delinquency in mortgage payments, a foreclosure process begins. The entity that oversees your mortgage is known as your lender or the mortgage servicer. The mortgage servicer is different than the company that owns the mortgage note.

Prevent foreclosure through timely mortgage payments

To prevent any foreclosure case, the first thing is to never be behind on your mortgage payments.

When you sign for a mortgage loan in Michigan, you agree to pay your monthly mortgage payments on time.

Nevertheless, many times in life there are situations where you may be facing foreclosure because we go through emergencies, we lose our jobs, or life circumstances change.

As expert foreclosure defense attorneys, we are ready to offer legal advice to stop foreclosure. In this article, we are discussing some options.

Nevertheless, the best thing you can do to stop a foreclosure is to review your case with an experienced attorney.

The Babi Legal Group has decades of experience in stopping the foreclosure process in its tracks and providing you with free foreclosure prevention analysis.

Use a strategic mortgage default to get mortgage relief

 

In an attorney-client relationship, sometimes a lawyer can propose a strategic default to propose to the mortgage company modified mortgage terms through a loan modification which can reduce the monthly payment, reduce the interest rate and make your mortgage current.

This is when a borrower decides to stop making payments on mortgage debt while still having the financial capacity to do so.

Before you stop paying…

It’s critical to speak with a qualified professional before missing any payments, which can harm your credit.

An experienced lawyer usually provides free consultations to discuss your finances and the best way to achieve your long-term objectives, including addressing other debts and financial problems.

How to get a loan modification in Michigan

A loan modification is an agreement between the mortgage servicer and the homeowner, where the mortgage company can through a new mortgage agreement reduce your monthly payment and the interest rate to make your mortgage payment more affordable based upon your current income analysis. 

The mortgage company will also in some cases reduce the principal mortgage balance. This makes it easier for the person to afford their monthly payments.

If you fall behind on your payments, you may be able to add the missed payments to the end of the loan, so you will not be required to repay it until your loan matures.

To apply for a mortgage loan modification to stop foreclosure, you need to contact your loan servicer at least 30 days before the foreclosure sale date. They will ask you for information about your income, expenses, and financial condition.

You will need to provide some documents to support your application. The process may seem difficult, but having a foreclosure defense lawyer on your side can make the difference between being approved or denied for a final modification.

Most law firms offer a free evaluation of your case and offer a realistic plan to assist you in obtaining a final loan modification.

A foreclosure attorney that helps you face a Michigan foreclosure

You may seek assistance from a housing counselor if you are facing foreclosure. A free housing counselor can assist you.

You should never pay a charge for lender assistance. Use a certified counselor from the Michigan State Housing Development Authority (MSHDA) or the United States Department of Housing and Urban Development (HUD).

Expert attorneys

You can also go to expert foreclosure lawyers. A law firm that is experienced in bankruptcy has a deep knowledge of the court process, the loan documents, and the mortgage litigation that has to be followed, all in a confidential relationship. They also can stop a foreclosure in its tracks by filing a bankruptcy petition before the foreclosure sale date.

In Michigan, how can I stop foreclosure? 

There are several ways to stop a foreclosure and each possibility depends on the specific details surrounding your reasons for why you are facing foreclosure.

Here’s a list of foreclosure prevention methods:

  • Bankruptcy, either chapter 7 or chapter 13.
  • Begin loss mitigation with your mortgage servicer at least 30 days before any foreclosure sale date. This would include a loan modification; short sale; or deed instead of foreclosure.
  • Filing of a wrongful foreclosure complaint in the County Circuit Court.
  • Paying off the delinquent mortgage payments that have caused the foreclosure. 
  • Refinancing the loan before the foreclosure sale.

Once a foreclosure begins…

When you miss a payment or are unable to modify your loan, your lender can initiate the foreclosure process.

It can accomplish a foreclosure in Michigan by either advertisement or through the court process.

A foreclosure by advertisement is the announcement of the foreclosure by publishing a notice of foreclosure in a local newspaper and affixing the notice of foreclosure to your property. 

This process allows the mortgage company to streamline the foreclosure process since they do not need to process the foreclosure through the court system.

Can a foreclosure attorney stop the Sheriff’s sale?

The Sheriff’s Sale Notice is published for at least four weeks. To avoid foreclosure, a law firm can assist you with a variety of things during this time.

After the Sheriff’s sale date has been established, you can find foreclosure lawyers that can help you avoid foreclosure by selling your home for fair market value before the foreclosure sale date.

You also have the option to refinance your house. Before the foreclosure sale ends, you can stop the foreclosure by seeking a loan modification. However, it is recommended that you request modification assistance at least 30 days before the foreclosure sale date.

If you decide to declare bankruptcy, then the bankruptcy automatic stay will stop and cancel the foreclosure if you file the bankruptcy case before the foreclosure sale date.  Even while you are in bankruptcy, with the right legal counsel you can also request a mortgage modification that the bankruptcy court will oversee.

How to find good Michigan foreclosure attorneys?

Be careful when choosing foreclosure attorneys. You do not want to go to a debt relief firm, which will have very limited options.

Make sure the law firm you retain is experienced in both pre and post-foreclosure assistance. Ask about their knowledge of the federal law, the United States Bankruptcy Code as well as the Michigan one, since some laws are state-specific.

With the right law firm, you may even be able to rescind a foreclosure or realize any post-foreclosure equity you have in the property during your redemption period.  In Michigan, you are entitled to a 6 month or 1 year redemption period, although in most cases, it’s a 6-month redemption.  The redemption period is valuable time you have to seek last-minute options that could save your property or put cash in your pocket.

Do not trust all websites

Try to avoid websites and other automated technology that offer paid attorney advertising.

Do not share any sensitive or confidential information as well as your case details, contact info, or email with third parties.

 

What You Need to Know About Credit Counseling in Michigan

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Many people, depending on their financial situation, believe that credit counseling in Michigan will harm their credit report, but this isn’t the case.

This won’t show up on your credit report if you go to a Michigan credit counselor to get debt advice or assistance to manage your money.

Michigan credit counselors will guide you on several matters, such as credit card debt, consumer credit, student loans, budgeting, and debt and money management.

What is credit counceling?

 

Michigan credit counseling is a counseling session that helps people with financial difficulties or those who are unable to pay their debts.

You will establish new financial goals through counseling services, that will give you excellent financial tools.

When do I need credit counseling?

If you are being pressed by many debt collectors, Michigan credit counseling may be the best choice for you. It’s also an excellent option if you have a large number of student loans.

How good are you at financial literacy?

If your financial situation and your credit score are keeping you awake at night, it is time to begin to think seriously about how to get out of debt.

Credit counseling can help you to manage debt by getting better in your personal finance. Forget about credit card bills and unsecured debts.

Debt counseling will give you debt repayment strategies that will bring back your peace of mind.

Things to know before your initial counseling session

There are several frauds on the market that claim to provide debt relief, such as credit counseling, credit repair, and debt settlement.

When an organization claims something is too good to be true, it’s almost certainly a scam.

So, if you’re seeking a way to reduce your debt and not sell yourself short on money, consider shopping around before settling with a debt settlement business or a credit repair firm.

Only deal with a Michigan credit counseling business that has been approved.

A debt management plan in Michigan

If you’ve been paying only the minimum amount on your credit cards, or if you’ve missed a few payments, seeing an expert Michigan credit counselor can truly help you get rid of most of your financial problems.

A debt management plan combines all of your debts into a single monthly payment, making it easier to handle.

If a debt management plan is appropriate for you, your Michigan credit counselor may suggest one for your debt repayment.

What to look for in a credit counseling agency in Michigan

A free or nonprofit credit counseling agency can help you prepare a budget, avoid bankruptcy and handle student loans. They will also advise on money management to keep your debts under control.

The state of Michigan offers free credit counseling, a service that can help you avoid the need for debt settlement services.

Although bankruptcy is available in this state, it isn’t always the most effective or efficient way to deal with your financial challenges.

Certified credit counselors

Look for credit counseling agencies that have been approved by the National Foundation for Credit Counseling (NFCC).

You should also ask the Better Business Bureau (BBB) for the counseling organization you have chosen. Look for reputable credit counseling organizations that have high ratings.

The Consumer Financial  Protection Bureau can also help you find a reputable financial counseling association in Michigan that includes a free credit counseling session.

What must I share with my Michigan credit counselor about my personal finance?

If you want to reach debt consolidation and be relieved about your monthly expenses, find a reputed credit counseling organization with whom you can share your entire financial situation (even if you think you have too much debt, which can be not as much compared with other individuals).

What services does a nonprofit credit counselor offer?

A credit counselor from a reputed credit counseling organization may offer a variety of services.

After you’ve shared all of your financial information, a credit counseling session may include free educational resources such as basic money management advice as well as a plan to help you pay off debt.

In some situations, credit counselors may be able to negotiate reduced interest rates, decreased monthly payments, and other benefits with your lenders, which might help you save money.

You will also get better at your money management skills by making timely payments, paying off your credit card debt, and knowing the steps to get a better consumer credit score.

How to become a certified credit counselor in Michigan

If you wish to help people with a credit counseling service, you need to become a certified credit counselor.

The Michigan Debt Management Act of 1975 PA 148 requires a licensed counselor to be certified to help people in financial hardship with credit counseling services and debt management plans.

Individuals who have completed a training or certifying program, and who have been authorized by the director are considered certified credit counselors.

Look for facilities in Michigan that are authorized to verify the competence of people who give education and assistance to others in connection with debt counseling and financial counseling activities.

What’s The Timeline I Can Expect When I File for Bankruptcy?

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A standard Chapter 7 bankruptcy timeline

Step #1 – Free consultation

At the first consultation, a legal representative from the Babi Legal Group will work with you to pick the finest option for assisting you towards the best financial management. If bankruptcy is not a good fit for you, then a settlement may be an option.

However, if a bankruptcy case is the only viable option, our law firm will evaluate whether you should file Chapter 7 bankruptcy or Chapter 13 bankruptcy. The choice of which one to pursue will be determined based on your unique circumstances and ultimate goals.

Step #2 – First credit counseling course

Before a person files bankruptcy, he or she must first take a credit counseling course from an authorized credit counselor. Every bankruptcy case is required to provide a credit counseling certificate with the bankruptcy case filing and Babi Legal Group will connect you with our partnered credit counselors to complete the course by phone or online.

Here you can find the list of approved debt management providers in Michigan.

Step #3 Filing your bankruptcy petition

The bankruptcy court also requires financial papers to verify that the bankruptcy documents accurately reflect your current financial situation. Because each customer’s situation is different, your attorney will provide you with a prioritized list of documents that our office and the court will need to achieve a bankruptcy discharge.

After your documentation has been evaluated and reviewed by our attorneys, we will submit all of the required paperwork to the bankruptcy court and bankruptcy trustee. The documentation you may have to include are as follows:

  • pay stubs or profit and loss statements if you are self-employed
  • vehicle statements
  • real property documents such as mortgage statements; recorded mortgages and deeds and property tax statements.
  • bank statements
  • an estimated value for real estate
  • tax returns
  • other certain debts

We scan all of the papers and return them at the end of your appointment if you bring only originals.

The client will come into the office once it is ready, and a lawyer will review the bankruptcy petition with him or her to ensure accuracy. After a thorough review of the petition, the client will sign it and we will submit it to the Court for electronic filing. This is done through their website and other automated technology.

Once the petition is filed, the bankruptcy automatic stay comes into action. The bankruptcy law then protects you from creditors and helps to prevent a sheriff’s sale, wage garnishment, vehicle repossession, creditor intimidation, and much more.

After your bankruptcy lawyer files your petition, you will receive a case number. Your case is assigned to a bankruptcy trustee at random.

Step #4 Second counseling course and 341 creditors meeting

A second credit counseling course must be completed once your case is filed and must be completed before you can receive a bankruptcy discharge. 

The Court will schedule a 341 meeting, also known as a meeting of creditors, within days of filing the bankruptcy petition. This is when the trustee may look over your situation and ask a few questions they may have.

The 341 hearing or meeting of creditors is usually held 30 days after filing your case. In the mail, you’ll get your notice of 341 hearing as well as a reminder from our office the day before the hearing.

You must bring your driver’s license, social security card, and any other document requested by your attorney to the 341 hearing.

Step #5 Discharge of debts

After 60 days from your 341 hearing being concluded, you can start checking your mail. The official order discharging you of all your debts will be sent to you by the United States Bankruptcy Court. The bankruptcy judge will officially enter your bankruptcy discharge and the bankruptcy court will send to both you and your attorney the official discharge order.

What does a bankruptcy attorney do?

Filing for bankruptcy is one of those moments in life when you appreciate any legal advice. Having a professional attorney by your side in any bankruptcy case, whether it is Chapter 13 or Chapter 7 bankruptcy, is worth it every step of the way.

Remember that as in any attorney-client relationship, even if these are only financial affairs, any sensitive or confidential information, as well as case details, contact info, or important dates, have to be necessarily secure and remain inside the confidential relationship.

What will I learn in credit counseling?

Trusted credit counseling organizations have professionals with training and certification. An approved agency will have the court’s permission to assist you in crafting a unique strategy for addressing your financial concerns.

A one-hour consultation is generally followed by multiple follow-up sessions. A legitimate organization should provide information about its services without requiring potential customers to disclose any information about their difficulties.

How to find a trusted attorney?

 

In your bankruptcy timeline, finding a bankruptcy attorney should be at the top of your list.

First, be aware of any lawyer referral service. Some websites try to provide that but bear in mind they are not thinking about the excellence of a bankruptcy attorney or their professionalism.

Other websites provide attorney listings and attorney advertising by zip code search. Be careful here when third parties are offering the contact information. Choose attorneys which are recommended by people you know that have been in the same situation or by reading client reviews about that attorney or their office.

In your bankruptcy timeline, finding a lawyer that provides a free evaluation of your case is an asset. This of course does not constitute acceptance of their terms. Having free consultations might guide you to the best attorney that will help you with your bankruptcy case.

Remember once you have chosen a law firm, you have to sign a written fee agreement disclosing the services that will be provided by the attorney. Then you can continue with the next steps in your bankruptcy timeline.

 

Three Bankruptcy Alternatives: How to Avoid Filing for Bankruptcy in Michigan

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If your financial circumstances this year have been adverse to you and your family, here is an article that can guide you through several alternatives to bankruptcy.

If you want to discuss your case details contact info for Babi Legal Group is on this website. With our contact information choose attorneys that are on your side no matter what.

Thinking about bankruptcy alternatives?

Before filing for bankruptcy, take a good read at these three alternatives to bankruptcy we offer and other sound advice, from debt consolidation loans, finding a good financial advisor, doing a repayment plan, and having excellent debt management.

In the United State of AmericaIndividuals are not incarcerated for failing to pay bills, meaning there are no debtor prisons,(for example, not being able to pay settling your mortgage is not a crime). Filing for bankruptcy or having a negative credit score is not the end of the world. Read on for more advice.

Alternative #1 – Debt consolidation plans

If you are thinking about settling debts before you go to bankruptcy court let the Babi Legal Group help you to avoid court judgment.

A debt consolidation strategy is an excellent option for individuals who are struggling with unmanageable bills. 

Debt consolidation combines all of your creditors into one payment every month. To pay off all of your debts, you’ll need to take out one loan and use it to repay them all.

As one of the best bankruptcy alternatives, this is a process through which you combine several debts into one. The objective of debt consolidation is to obtain a lower rate on your existing loan than you currently have with your creditors.

You may frequently lower your monthly payment by lowering your interest rate. This should assist you in repaying the debt in full while having little influence on your credit history and rating.

How can I have one of these plans?

To know if this kind of debt relief is at hand for you (or if you have excessive debt or an unsecured debt), contact a bankruptcy attorney at Babi Legal Group. We are here to help you pay debts and get you back to a healthy personal financial situation.

A debt consolidation loan is a method for some consumers to get rid of the hassle of paying numerous creditors by taking out a loan that combines all of their obligations. This can be part of your debt management plan.

Alternative #2 – Loan Modification

If your financial issue is primarily due to the inability to pay your mortgage, then at Babi Legal Group we can help you save your home through a loan modification without having to file a bankruptcy petition. 

Some of the benefits a loan modification can achieve for a homeowner include the lowering of your interest rate, the reduction of your ongoing, monthly mortgage payment, the deferment or forgiveness of missed mortgage payments resulting in the cancellation of a foreclosure sale and even a reduction in the total balance owed on your mortgage!

 

You may qualify for a loan modification if you have experienced a financial hardship such as a loss of income, divorce or medical issues, for example. Most lenders can and want to work with homeowners, even if they have poor credit and have a foreclosure date scheduled since they do not want your home. Even if your home is not in foreclosure yet or you are current with your mortgage payments, a loan modification is an option that all homeowners should explore. It is, however, often difficult to determine what kinds of options are available to you, whether you will qualify for a loan modification and whether there is a good chance of successfully obtaining a loan modification.

Alternative # 3 – Do a debt settlement

There are several ways to avoid bankruptcy. Debt settlement or debt negotiation is a very good alternative to bankruptcy. When you have a few significant bills, debt negotiation and settlement are frequently used. 

With the Babi Legal Group on your side, we will be able to contact the creditor or the creditor’s attorney to negotiate a lump-sum payment or a discounted payment plan of your debt that you are delinquent or behind on. 

The objective is to get a settlement for as little money as possible. Babi Legal Group attorneys have created several unique strategies to obtain the finest bargain feasible.

One of the most essential aspects of a debt settlement is having adequate cash on hand.

Creditors typically demand a lump sum payment within 30 days of a debt agreement being reached. As a result, it’s critical to be able to access the money before settling your bill.

In this way, your personal financial situation might be reestablished soon, and you will be able to save money as well. You will still have financial obligations. Call our office today so our attorneys evaluate your case.

Careful with scams on your credit record

Debt settlement, or debt negotiation, is a method of negotiating your debt that allows you to pay a reduced amount as full payment. However, there are several issues linked with debt settlement programs, including fraud and credit score harm.

Several firms that provide debt settlements are frauds. The FTC’s website offers details about the issues linked to debt settlement programs.

Bankruptcy attorneys in Babi Legal Group are strictly regulated by the State of Michigan, unlike debt settlement businesses, where there are no rules. Make sure your debt management program is handled by the correct person.

Expanding the Receivership Act in Michigan

A recent change was made in Michigan, which broadens the scope of receivership procedures, a liquidation alternative to bankruptcy. Previously, the receivership statute in Michigan only applied to commercial real estate receiverships.

The Department of Treasury and the Office of Financial Management have provided a solution that covers all operating companies in Michigan, as well as commercial and industrial loans without regard to real estate collateral.

More creditors will have the option of requesting the appointment of a receiver under the Receivership Act. The UCRERA was previously confined to foreclosures and the enforcement of a mortgage on commercial real estate, although it has been expanded in recent years.

The new law changes the term “mortgage” to “security agreement or lien,” which vastly expands a creditor’s power to seek and a court’s authority to appoint, a receiver. More creditors will be able to request the appointment of a receiver under the Receivership Act, which went into effect in July 2021.

In conclusion, the amendment broadens the definition of “receiver” under the Receivership Act in Michigan to include non-commercial real estate circumstances and provides for a more organized procedure for receiver appointment.

Your debt management plan

Even before you think of bankruptcy, every time you ask for a loan, borrow money or pay taxes, you should have a personal backup savings plan. You can begin by putting away only a small fraction of your total monthly income.

Here are some tips that can help:

  • Find out about all interest rates before asking for a loan
  • Look for a nonprofit credit counseling agency that can be your companion when asking for credit lines
  • Never lend money
  • Always look at your remaining debt when you are paying a loan so you see the money is being discounted
  • Find ways to have a better credit score
  • Try to buy a used car instead of opening any car loans
  • Try a free evaluation that you find in any attorney listings to see how many secured and unsecured debts you have
  • Transfer debt to credit cards that offer the lowest interest rate
  •  If you have equity in your house, you can use a home equity loan to pay unsecured creditors

How important is your credit report?

The term “bankruptcy” has a negative connotation, and it is not always used to describe individuals who are legally unable to pay their debts. For those who do choose to declare bankruptcy, it can have devastating effects on both their mental health and credit history.

The major advantage of enrolling in a debt management program is that it will not damage your credit rating further. The seven-year reporting period (which is up to ten years) for negative items in your credit report linked with past obligations applies to all bankruptcy filings.

Bankruptcy will not appear on your credit reports, however, it will be noted in the report that you joined a debt management program. You will of course need some credit counseling as well.

Advantages of not having to file bankruptcy with legal advice by your side

Not everyone who is bankrupt has to proceed with a bankruptcy filing. There are public assistance benefits many people do not know of, as well as debt loans and debt management plans that can save a family.

Looking for a bankruptcy alternative in a confidential attorney-client relationship can bring you numerous benefits in this legal process. An attorney can also be a credit counselor that is extremely careful with sensitive or confidential information like how much money you owe.

What does the bankruptcy trustee investigate?

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There are a lot of reasons why people file for bankruptcy, but they all have one thing in common: they want to get rid of their debt. To do that, the trustee will need to investigate your life and finances from top to bottom. The goal is not just to figure out if you’re eligible for bankruptcy relief, but also what caused you so much financial distress in the first place.

What is a bankruptcy process?

A person or firm that is unable to repay its outstanding liabilities goes through the bankruptcy procedure.  The bankruptcy process is made up of various steps. The first step in the procedure is filing, which can be done by either an individual or a business that owes money to its creditors and cannot repay it.

Who can file for bankruptcy?

The debtor who is either an individual or a business files a voluntary bankruptcy petition which will notify everyone on the debtor list in the bankruptcy to notify them of the filing, this, is the most frequent type of filing. The creditors can also file a bankruptcy petition on behalf of the debtor, which is known as an involuntary bankruptcy, though this is less common. The assets of the debtor, including real estate, are all weighed and assessed. They might be used to repay a part of the outstanding debt or even the total debt.

Advantages and disadvantages of filing bankruptcy

Depending on which sort of petition you submit, declaring bankruptcy can help you avoid having to repay your debts and preserve your house, vehicle, business, or other potential assets. However, declaring bankruptcy will negatively impact your credit, and lowering your credit score might make it hard to obtain car loans, house mortgages, or even a credit card.

What does the bankruptcy trustee investigate?

Whenever you file for bankruptcy, you will have a trustee assigned to your case. The bankruptcy trustee thoroughly examines your bankruptcy petition and supporting documents such as tax returns, pay stubs, property deeds, mortgages, and bank statements to look for hidden assets, avoidable transactions, and other irregularities before you are allowed your final discharge. This means that the bankruptcy trustee needs access to all your financial records, bank account information, monthly payments, total monthly income, and any other financial documents dating back to 6 months and in some cases 2 years.

Will a bankruptcy trustee always look for bankruptcy fraud?

The trustee will ask everything about your financial situation. If the bankruptcy trustee suspects fraud, he or she will take action if it appears that a fraudulent act might deprive creditors of the money they are owed. If necessary, it is the trustee’s job to also refer the case to the United States Trustee, which is a part of the department of justice while looking at your financial situation.

If a United States Trustee suspects fraud, it can bring federal criminal charges against the debtor seeking penalties and jail time.

What does the bankruptcy trustee investigate in a Chapter 7 bankruptcy?

The 341 meeting of creditors is required for everyone who files for Chapter 7 bankruptcy, whether it’s an individual or a business. The bankruptcy trustee—the individual in charge of your case—will verify your identity and ask you about your bankruptcy filing under oath at the hearing. Sometimes in Chapter 7 bankruptcy, the trustee may sell any nonexempt property for the benefit of the creditors, however, the debtor in most cases has the right to convert the case to Chapter 13 to avoid the assets from being sold.

What does the bankruptcy trustee investigate in Chapter 13?

If you file a Chapter 13, the trustee is required to do many of the same things a chapter 7 trustee would do, but the chapter 13 trustee does not sell your property.  Instead, the chapter 13 trustee will require you to repay your creditors through your chapter 13 repayment plan the same amount that the creditors would have received if your property was sold by the chapter 7 trustee. . The trustee also collects all the chapter 13 plan payments and sends money to creditors each month as provided for in the chapter 13 plan. While looking into your financial affairs and bank accounts, the trustee examines whether you could—or should—pay more to creditors than what you’ve said in the Chapter 13 plan.

Do I need a bankruptcy attorney to face the bankruptcy trustee?

Beginning an attorney-client relationship is very important when filing for bankruptcy. In this confidential relationship, attorneys evaluate your bank statements, tax returns, and any other document of the estimated value for your real and personal property to accurately evaluate your case. They help you fill in your bankruptcy forms with case details, contact info, as well as helping you get together all your bankruptcy documents.

A bankruptcy lawyer will give you sound legal advice. You will have their law firm behind you to help you with anything the trustee asks. Yes, having professional help can help you avoid losing your assets to a trustee sale as well as provide sufficient evidence which a trustee will accept to evaluate your case.

Your bank account and the bankruptcy trustee

The bankruptcy trustee will examine your bank account. The trustees are beginning to delve into bank records more thoroughly. They discover hints of belongings that debtors may have sold or money that vanished without a trace.

The trustee will want to see at least 3 months of bank statements from the month you filed the case. The more months, the better.

Your trustee can request bank statements from you for all of the years in question. Bank statements can also be used to verify your income and expenses as stated to file bankruptcy.

Going to bankruptcy court

Federal courts handle all bankruptcy cases according to the United States Bankruptcy Code’s regulations. There are several types of bankruptcies, which are identified by their chapter in the U.S. Code.

Because bankruptcy has long-term financial and legal repercussions, it is highly advised to seek the assistance of a competent attorney. Filing pro se is the term used to describe people who file bankruptcy without the aid of an attorney. 

How to find the best attorney listings?

The resources below can assist you in locating a bankruptcy lawyer if necessary. If you don’t have the cash to pay for an attorney, you may be eligible for free legal services. Many lawyers offer a free evaluation of your case, especially if it is a Chapter 7 bankruptcy.

  1. LSC – The Legal Services Corporation (LSC) is a private, non-profit organization that advances equal access to justice by offering financial assistance to more than 100 independent nonprofit legal aid organizations in each state, the District of Columbia, and U.S. Territories.
  2. American Bar Association – The mission of the American Bar Association’s Legal Services Division is to assist and expand access to justice for all people by providing legal assistance, counsel, and representation in the country’s civil, criminal, and military justice systems.

If you use Google, beware of any attorney advertising miracle legal advice. More than one bankruptcy attorney will do some paid attorney advertising to be at the top of website searches through automated technology.

There are also several websites where it will be considered a paid attorney advertising to access information about attorneys. In other states, a website’s content may be classified as a lawyer referral service.

If you are looking for professional help to fill bankruptcy forms, avoid lawyer referral services and third parties with any other automated technology. Look for direct contact information. Choose attorneys that have a recognizable law firm that can give you personal attorney-client attention. Sometimes a Google zip code search for lawyers gives the best result.

 341 Meeting of Creditors

In any of these cases, the meeting of creditors is a hearing for all debtors. It’s also known as a 341 meeting since it’s required by Section 341 of the Bankruptcy Code. Because they are not obligated to attend, creditors do not waive their rights if they do not attend these meetings. Your attorney can help you with the filing date and any supplemental terms you will need to necessarily secure your bankruptcy discharge.

Learn more about bankruptcy trustees

Bankruptcy is a legal process that allows debtors to get a fresh financial start while still protecting their property and assets. Babi Legal Group’s bankruptcy attorneys have several years of experience advising people on how to successfully navigate the bankruptcy process by addressing all of their concerns, from A to Z to successfully obtain your bankruptcy discharge.

How to file bankruptcy yourself in Michigan (and why you shouldn’t do it yourself)

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  • Get your finances back on track 
  • Rebuild credit and get a fresh start 
  • Rest easy knowing that you’re doing what’s best for your family

If you are in bankruptcy and need to know how to file bankruptcy yourself in Michigan, we can help. We will tell you why filing bankruptcy yourself is a bad idea and what the consequences of doing so could be for you. It doesn’t matter if it is Chapter 7 bankruptcy or Chapter 13 bankruptcy. We’ll also give you some tips that might make bankruptcy much easier on your part. Let’s get started!

Filing bankruptcy in Michigan

The process of bankruptcy and bankruptcy law can seem complicated and daunting, but with the right support, it isn’t as hard to understand. Filing your petition in Michigan for any type of financial emergency will require meeting up with bankruptcy lawyers who are experienced in either chapter 7 bankruptcy or chapter 13 bankruptcy to determine what is best suited towards resolving your situation before starting this journey which has lasting effects long after proceedings have finished!

Does it work when people file themselves for bankruptcy?

The answer is usually it doesn’t. A person, partnership, or company’s debts becoming so huge that they do not believe they will be able to pay them may file for bankruptcy. Bankruptcy is a legal procedure in the United States Courts in which a judge and trustee look at the assets and liabilities of people, partnerships, and businesses that cannot pay their bills.

Filing for Chapter 7 or Chapter 13 bankruptcy requires thorough study and understanding of legal issues. You might lose your rights due to a lack of knowledge or errors during the process. Official bankruptcy forms can be difficult to understand. The federal law prohibits bankruptcy court employees and judges from giving legal counsel for a bankruptcy case. This is why it is better to work with a qualified attorney.

Steps to file bankruptcy for yourself

 

The basic principle is that the easier your bankruptcy, the better your chances are of finishing it on your own and obtaining a bankruptcy discharge, (i.e., the order erasing your debt) which is considered by most to be the most difficult aspect of bankruptcy.

The first thing you should do is collect all of your financial papers to better understand your current financial status. Every person who files for bankruptcy must take a credit counseling course in the six months leading up to their bankruptcy filing.

Forms must be completed and submitted to the court, which may take time away from your situation. The forms are lengthy, with at least 23 separate documents plus 70 pages in total. A Chapter 7 bankruptcy filing fee of $338 is required by the federal court. When a bankruptcy petition is filed with the court, this amount is usually due.

After you’ve completed your bankruptcy forms, you’ll need to print them out for court. The 341 meetings, or creditors’ meetings, will take place about a month after your bankruptcy case is filed.

What does a bankruptcy attorney do?

 

During a bankruptcy process, having a bankruptcy lawyer by your side and covering the attorney fees pays off. Your lawyer is there to help you with the legal aspects of your case. They will advise whether or not filing bankruptcy makes sense and how it can affect your property as you may be at risk of losing the property to the chapter 7 trustee who is required to sell it to help you pay your creditors.

They know the federal bankruptcy code, so they can give you education on what happens during each stage of the procedure. They are fully prepared when their client with an overwhelming debt needs them most!

File for bankruptcy with a professional legal advice

 

Your lawyer’s job isn’t just helping one person get out from under debt; rather it’s advocating in every aspect involved, from debt management to credit counseling courses to bankruptcy proceedings.

If you owe money and are looking for some debt relief, whether it is a credit card debt or from delinquent loans, the best way to face a bankruptcy judge and bankruptcy laws is with a qualified attorney by your side. Beware of free legal services that usually end up not being so.

Bankruptcy lawyer and bankruptcy filing in Michigan

You’ll need to gather all of the paperwork you’ll need to file your Chapter 7 bankruptcy in Michigan. Keep in mind that you’ll need papers to complete the forms as well as documents that you’ll be required to submit to the trustee before your 341 meeting of creditors’ hearing.

The most essential things you’ll need to file your Chapter 7 bankruptcy in Michigan are income information, including pay stubs and prior years’ tax returns. You also need to have all past and present bills. A lawyer will come in extremely useful at this point.

A bankruptcy attorney will assist you in documenting the names and addresses of everyone to whom you owe money. If you’re unsure about who all of your creditors are or how much you owe, a Michigan attorney may be able to help. He understands the local rules and can help you with all financial documentation and credit reports required.

How can I go to a bankruptcy court with no money?

In bankruptcy, the financial eligibility requirements are often a matter of interpretation. In some cases, bankruptcy courts say that you can’t file bankruptcy if your income is too high. If you have property or assets, this may make it difficult to qualify for Chapter 7 bankruptcy without losing those assets in the bankruptcy case.

Secured debts are different from unsecured debts, which both can be eliminated in bankruptcy. A bankruptcy attorney can help you with the bankruptcy proceedings, but your eligibility may depend on your state’s laws. 

How bad is filing for bankruptcy in Michigan?

Bankruptcy in Michigan is a nightmare for many people who try it on their own. It’s not necessary to file bankruptcy yourself when you can hire an attorney that knows all about personal bankruptcy and have all of the required forms completed by someone who knows how everything works!

The bankruptcy process requires time, patience, and attention to detail on your part. There are legal documents that need to be filed with the bankruptcy court and the trustee.

Different bankruptcy lawyers in Michigan will have different ways of handling your bankruptcy filing. The process can be streamlined with a lawyer’s help, and many people who try to file bankruptcy themselves end up making costly mistakes that could ruin their chances for debt relief.

Bankruptcy costs money, so it makes sense to hire an experienced bankruptcy lawyer to help you. Depending on your financial situation, bankruptcy attorney’s fees are paid out of the money they save you on unnecessary bankruptcy costs.

The best way is by asking for referrals from your friends and family members who have filed for bankruptcy in Michigan or other parts of the country. Ask each person you speak with to provide you with the bankruptcy attorney’s name, phone number, and office address.

Filing bankruptcy when you have real estate

If you have real estate, filing for bankruptcy will have different consequences depending on the bankruptcy chapter you choose. When filing bankruptcy under Chapter 7, your real estate property or home may be exempted from liquidation if it meets certain requirements. However, there are some cases where the trustee has no choice but to sell this kind of asset to distribute funds among creditors.

Under Chapter 7, if you have real estate, it may be included in a bankruptcy liquidation. However, if you have a home or real estate which is your primary residence, it could be exempted. You might choose to file for Chapter 13 bankruptcy if you need time to repay your mortgage arrears, stop a foreclosure or stop a repossession of your vehicle while restructuring the vehicle loan in the chapter 13 bankruptcy plan that can last anywhere from 3 to 5 years.

What affects bankruptcy and debt relief?

Many circumstances can affect what type of bankruptcy you qualify for or what may be best for you.  At Babi Legal Group, our experienced attorneys can help decipher the details to put you in the best position after filing for bankruptcy.  For instance, married couples can file for bankruptcy together or one spouse can file all on their own.  It is important to understand how these types of different scenarios can affect your case and what could be expected of your non-filing spouse.

What is a bankruptcy petition?

A bankruptcy petition is the bankruptcy paperwork that is required to be submitted to the court detailing your financial situation as well as your assets and liabilities.  The Court, trustee’s and creditors alike rely upon the petition to tell your financial story as to why you are eligible and seeking to file bankruptcy.  The petition is something that should be carefully prepared and reviewed before filing.  A well-prepared petition makes all the difference between a smooth case and a terrible bankruptcy experience.

foreclosure

Loan modifications and foreclosures

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Everyone experiences hard times now and again. Sometimes, tough economic times can result in scary outcomes, such as the threat of your home being taken away.

If you’ve fallen behind on your mortgage payments, your mortgage company can initiate a foreclosure to take back their asset. If you don’t act quickly to prevent foreclosure with a loan modification, you could soon find yourself without a place to live.

Babi Legal Group has more than 10 years of experience helping people stop foreclosures and negotiate loan modification agreements. They have years of experience working with banks and know the ins and outs of home loan modification laws.

What is a mortgage loan modification?

Banks are not in the business of owning homes. At the same time, they obviously don’t allow their borrowers to live in homes without paying for it.

That’s why loan modification programs were created — to allow the homeowner to make up for missed payments and prevent the bank from foreclosing on the home.

A mortgage loan modification is an agreement between the mortgage company and the borrower that results in a restructured loan that makes it more affordable for the borrower to pay. Depending upon your situation, there are a number of ways a foreclosure modification can be done.

Lenders know that people can experience temporary financial hardship due to a divorce, Covid-19, medical issues, or a loss of income, for example. Most lenders will be amenable to devising loans to stop foreclosure because, as mentioned, they ultimately don’t want your home back.

Can you be denied a loan modification?

While lenders are often amenable to helping their borrowers, there are no loan modification laws that require them to do so. Just because you apply for a loan modification doesn’t mean you will automatically be approved.

Your lender may deny your application for a modification for any number of reasons, including but not limited to their determination of your ability to re-pay the modified loan, providing incorrect information or not providing required documentation in a timely manner.

Do you need a loan modification lawyer?

There is nothing in the loan modification rules and regulations that say you need to hire a lawyer to help with your application. However, having a loan modification lawyer on your team can certainly increase your chances of being approved.

For example, an attorney experienced in a foreclosure loan modification would be able to advise you to start the process of applying at least 30 days prior to the foreclosure sale date. That’s because a lender can still go through with a foreclosure during the loan modification process, even if the modification is pending and not finalized.

The team at Babi Legal Group has the experience necessary to guide you through a loan modification prior to foreclosure and even have successfully obtained loan modification after the homeowner has been denied. Dealing with a loan modification process can be complicated and time-consuming, making it difficult for people to do it on their own without the guidance of experienced professionals.

Loss modification after foreclosure

If you don’t act quickly enough, and in the right fashion, you could end up foreclosed on by your lender. If your situation gets to this point, your options are generally pretty limited — at least when dealing with the lender directly.

Once your home has been foreclosed on, a loan modification is no longer a viable option. In this scenario, we can help you challenge the validity of the foreclosure through the court system, something we have successfully done in the past for our clients.

This may allow you to prevent the foreclosure from becoming official and allowing you to keep your home.

Can a loan modification stop a foreclosure?

One of the most common questions borrowers ask is, “does loan modification stop foreclosure?” The answer is maybe.

It depends a lot on your specific situation, the lender you’re dealing with, and the timeliness of your efforts. In the experience of the attorneys at Babi Legal Group, most lenders will be willing to postpone a foreclosure sale if a loan modification is under review for a final determination.

The challenge is that most modifications can take anywhere from 30 to 120 days to complete. It may take a full month just to get to the review stage of the process. That’s why it’s essential that you start the process of loan modification as soon as you possibly can.

Loan modification programs

Each private lender will have different options for loan modification programs. If you find yourself in need of help to avoid foreclosure, you can reach out directly to your lender to see how they’re willing to work with you.  However, they have no obligation to approve you for a loan modification and will only advise you of the documentation you need to provide.

The federal government offers a number of different loan modification programs for borrowers who have a mortgage backed by the FHA, USDA or VA, for instance. Check with the federal agency that backs your loan to see what steps you’d need to take.

The state you live in also may offer specific programs to help you avoid foreclosure. Michigan, for instance, offers an interest-free loan through the Step Forward Michigan Program. Although this is not a loan modification, it’s another avenue of assistance that may help homeowners stay in their homes if they have experienced financial hardship.

The Michigan State Housing Development Authority also offers a number of resources and guides to homeowners in the state.

What do you need to get a mortgage loan modification?

Just like when you apply for a mortgage to purchase a home, your lender will want to analyze your financial situation to decide whether to approve you for a loan modification. Most lenders will want to verify that you can afford the modified payment, and will ask to see pay stubs or proof of your recent income, as well as copies of your tax return for the last two years.

For independent contractors who receive income through 1099s or small business owners, this can prove to be challenging. The experienced and professional attorneys at Babi Legal Group can help guide you through this process, no matter how complicated your financial picture may be.

Loan modification rules

The rules and regulations that will apply to your loan modification will depend on the specific program that you are hoping to get. For example, the FHA requires that borrowers must have adequate debt-to-income ratios as well as no other options loss mitigation programs at their disposal to qualify for the FHA-HAMP program. Borrowers must also go through a trial payment plan successfully before they are allowed to become full participants in the program.

For private loan modification programs, lenders will generally require borrowers to prove that they can’t afford their current mortgage payments and that they can afford to pay whatever the modified payments will be. The property usually has to be your primary residence.

Conclusion

Falling behind on your mortgage payments can be a scary situation. But it doesn’t have to be the end of your days in your home.

In most cases, and with most lenders, you can get a loan modification to avoid foreclosure. The process can be long, drawn-out and complicated, though, which is why it’s in your best interest to hire an experienced attorney like the ones at Babi Legal Group to guide you through the process.