Detroit, MI – The city of Detroit has an interesting history of bankruptcy. Back in 2013, the municipality of Detroit filed for bankruptcy under Chapter 9 of the United States Bankruptcy Code. Worth a total of $18 billion, this was the largest case of municipal bankruptcy on record, followed by Jefferson County, AL, at a rather measly $4B.
Over the years, Detroit’s infamous bankruptcy has been attributed to numerous causes – some blamed the auto industry globalization process, while others pointed at the ever-growing suburban sprawl. As ever, the truth, no doubt, lies somewhere in the middle, as all good lawyers will tell you.
True to its name, however, Detroit not only managed to overcome its legendary bankruptcy, but also rose from the ashes better and stronger. To walk through Detroit now, you’d be astounded at all the new housing estates and businesses that have come up. The city stands a far cry from its erstwhile financial disasters, and you can, too.
Today, we look at some of the ways in which debtors can survive and overcome bankruptcy court, and like Detroit, rise anew.
- Find a good lawyer to represent you.
If you’re going to get out of your bankruptcy case with all (or most of) your possessions intact, you’ll need to hire solid Detroit bankruptcy lawyers. It’s tempting to hire someone who’s fairly cheap, yet sounds knowledgeable, but you should resist that impulse.
Instead, do your own research. Come up with questions to ask your prospective lawyer, to make sure they know what they’re talking about. Look for someone who specializes in bankruptcy law, rather than doing it as a “side hustle”, alongside other types of law.
Most importantly, beware of bankruptcy mills. Mills are essentially law firms that churn out a high output of bankruptcy cases every year. So, when interviewing Michigan bankruptcy lawyers, don’t be afraid to ask them questions about their history. Pick someone who cares about you, not about the money.
- Don’t try to hide anything.
If you’re considering filing for bankruptcy, it may also be tempting to conceal your assets. If the courts don’t know about them, then they can’t take them, right? Wrong. A bankruptcy court will actually run a really thorough investigation into your financial situation. That means they’ll see if you’ve transferred property or substantial amounts of money to family or friends, in order to “protect” it.
Not only is this frowned upon in bankruptcy court, but it can also, in some cases, qualify as bankruptcy fraud. So your best bet would be to be upfront.
- Invest in your financial education.
Before contacting Detroit bankruptcy lawyers, you’ll be asked to undergo credit counseling sessions. That’s the court’s way of ensuring you’ve exhausted all other alternatives before filing for bankruptcy.
Even if you do end up filing, it’s worth taking those lessons to heart, to avoid future financial disasters. Pace yourself, and learn how to avoid outstanding debt in the future. Avoid taking out more loans, mortgages, or credit cards to pay off existing debt.
Speaking of education, since you’ll be dealing with lawyers and court clerks, now would be a good time to educate yourself a bit on legal matters.
If, like Detroit, you want to rise from the ashes of your financial woes, acknowledge your mistakes, so you can avoid them in the future.