Despite Signs Of Recovery, A Long Road Ahead For Michigan Economy
Both in Michigan and around the country, the recovery from the Great Recession has been gaining steam in recent months. However, the pace of recovery has been uneven at best, and many Michigan residents remain in financial distress.
In many regards, Michigan is seen as a leader in the nation’s economic recovery. For instance, Michigan is outpacing most other states in terms of private sector employment growth, according to a December 2012 report released by Business Leaders for Michigan. Nevertheless, according to the BLM report, annual unemployment in Michigan remained the third-highest in the nation during 2011, at 10.3 percent.
This seemingly contradictory state of affairs is due in part to the fact that Michigan lost far more jobs than most other states during the recession, and therefore has had a deeper hole to climb out of. While Michigan has gained about 150,000 jobs since 2010, according to Michigan Live, it lost nearly a million jobs in the previous decade. Thus, although the state has made impressive strides toward financial recovery, the road ahead appears long.
People who have experienced job loss, major injury or other unexpected circumstances often find themselves perpetually in debt through no fault of their own, and may be unable to keep up with their minimum payments – let alone make progress on their debts. In cases such as these, bankruptcy may be an option to help people get back on their feet and make a fresh start. There are different types of bankruptcy for different situations, and choosing the right type depends on each person’s individual circumstances and goals.
Consumer bankruptcy options
During Chapter 7 bankruptcy, which is sometimes called “liquidation,” many or all of a person’s debts can be forgiven relatively quickly, allowing him or her to begin again with a clean slate as soon as possible. In some cases, people who file for Chapter 7 bankruptcy are required to surrender certain assets in exchange for debt forgiveness. However, because many types of property are considered “exempt” from liquidation, people are often able to obtain debt relief through Chapter 7 without forfeiting any property at all.
In addition to Chapter 7, the other main form of consumer bankruptcy is Chapter 13, which is also known as “reorganization.” Chapter 13 is a slower process than Chapter 7, but it typically does not require any assets to be surrendered. Instead, a person’s debts are restructured and paid off over a period of three to five years. The payment plan prioritizes certain debts above others, and must be approved by a judge. At the end of the repayment period, some remaining debts may be forgiven.
Certain types of debts, such as child support, student loans and taxes, typically cannot be discharged through bankruptcy. However, relief from other forms of debt can often make repayment more manageable on any debts that remain after bankruptcy. To learn more about your options when dealing with unmanageable debt, contact a knowledgeable bankruptcy lawyer in your area.