GreenPath
debt solutions
Money management for a better life.
Bankruptcy
It’s a life-altering decision. Take the time
to learn your options and rights.
B
ankruptcy. We can’t tell you whether or not • Stop making new purchases on charge cards
to file, but we can tell you that it should be and concentrate on paying off existing debts.
the absolute last resort. This is one of the
most important decisions you will make in your
life, and you owe it to yourself to explore every
• Contact your creditors and negotiate your loan
terms to provide for lower monthly payments
Some facts about
option before resorting to bankruptcy.
Before you do anything, contact GreenPath Debt
or to temporarily skip payments.
personal bankruptcy… Temporary Relief
Solutions to speak to a financial counselor. We will
analyze your situation and discuss options with
you. One of those options may be a debt
management program on which creditors accept
Consider the following information when
deciding whether bankruptcy is right for you: vs. Long-term
lower payments.
Although you may be tempted by the short-term
• You must return the specific item or
merchandise on any secured debt (examples:
furniture, car, appliances), or you may keep
Repercussions
relief offered by bankruptcy. You’ll have to live the merchandise by re-affirming the debt and
with the negative consequences for years. continuing to make your monthly payments. It is always good to put your debt into perspective.
For example, while $20,000 is a lot of money, it is
• There are certain debts which are not less than a year’s wages for most families. While
dischargeable in bankruptcy. These debts bankruptcy may look favorable in the present
include federally guaranteed student loans, moment, making lifestyle sacrifices and seeking
Types of Bankruptcy most federal and state taxes (including income
taxes), child support, fraudulent debts,
alimony, spousal support, damages for willful
help from GreenPath and your creditors may be
the best route for long-term relief.
or malicious injuries toward another and dam Keep in mind, once you file for bankruptcy, you
The two major types of consumer bankruptcies are
There are alternatives
ages caused while drunk driving with a motor are unable to file for bankruptcy again for another
Chapter 7 and Chapter 13: vehicle. 6 years. If you file chapter 7 bankruptcy for a
smaller (or more manageable) amount, you do not
to bankruptcy Chapter 7
Chapter 7 is also called straight bankruptcy where
• Typically you will be able to keep your home,
a small amount of personal property, clothing,
food and other personal items.
have the option to file again if a more serious
emergency or tragedy happens.
the debtors submit all of their assets eligible for
It’s important to remember that bankruptcy bankruptcy to the trustee for liquidation and the
• Bankruptcy will be a black mark on your Example: Jim filed for bankruptcy while
protection was designed to be the option of last proceeds are disbursed to their creditors.
credit record for 10 years. $15,000 in debt. A year later, Jim’s wife
resort, not your first choice. Carefully consider got sick and they ended up with a
your alternatives, which may include the Chapter 13 • In the future you will have a much harder time $50,000 hospital bill, plus credit card
following: Chapter 13 is a debt reorganization plan. Instead of obtaining loans, credit cards, mortgages and debt that accumulated due to the illness.
turning over assets, the debtor submits a portion even rent. If you are able to obtain credit, there Without the protection of bankruptcy,
• Contact GreenPath Debt Solutions by calling of future income for distribution among creditors. is the potential of paying significantly higher they are left with the heartache of major
800-747-2898 to see if a debt management plan Chapter 13 bankruptcy allows a debtor with a interest rates or requirement of money in a debt and harassing creditor calls.
will work for you. regular income to pay all or a portion of their debt savings account to use as security.
under court protection. Debts are consolidated and
• Borrow the cash value of your life insurance reduced to one affordable monthly payment based • It is public information that may be reviewed Also remember: Bankruptcy only takes care of
policy to pay off debts. on disposable monthly income, letting the debtor by potential employers, insurance companies those debts you owed on the date you filed; it is
“catch up” on any delinquent payments while and lenders. your job to take care of all the new ones after that
• Sell luxury items and either do without or buy keeping their property. date.
less expensive items.
Your Rights as a
Consumer…
The Fair Debt Collection Practices Act is a federal
law that limits the type and frequency of contact a
creditor may make with a person that owes them
Bankruptcy Fraud money. Generally, a creditor is not permitted to
contact you at your place of employment as long
as you instruct that creditor not to do so. If you are
contacted at work, it is wise to request the name
If you find yourself facing bankruptcy, be pre-
and address of the person contacting you so that
pared to tell the truth. When you are asked about
you can send written notification to the creditor.
property and other assets you own, provide a com-
Always keep a copy of any written notice you send
plete list. When asked what it’s worth, be honest
to any creditor.
and forthright.
Creditors also may not contact you at any place
Bankruptcy fraud can land you in federal prison.
before 9 a.m. or after 8 p.m. Creditors may not
According to bankruptcy attorneys, the
contact you if you are represented by an attorney.
government is on the prowl for those who abuse
Federal law also limits the information they can
the bankruptcy laws, and when they find abusers,
obtain from your friends and neighbors. If
they put those people behind bars.
creditors are contacting you improperly it is
important that you get the name of the person
making the call, the company or person whom the
caller represents, and the date and time of the
telephone call. Federal law provides penalties for
creditors who do not comply with these laws. This
information might be useful at a later date if you
wish to pursue an action against these creditors.
Contact GreenPath Debt Solutions by calling
800-747-2898 to see if a debt management plan
will work for you. If you determine that
bankruptcy is your best option, contact an
attorney who specializes in bankruptcy law.
Disclaimer: This brochure highlights basic information con-
cerning bankruptcy issues. It does not represent the entire
process. Those seeking more information should contact an
attorney familiar with bankruptcy law.
GreenPath
debt solutions
Consumer Credit Counseling
Service of Michigan
Consumer Credit Counseling
Service of Southern New York
Consumer Credit Counseling
Service of Northwest Illinois
GreenPath, Inc.
Administrative Headquarters
38505 Country Club Drive
Suite 210
Farmington Hills, MI 48331-3429
800-747-2898
Visit our web site at:
www.greenpath.com
NOTICE: The services of GreenPath Debt Solutions are financed through
grants, client fees and voluntary contributions from the business com-
munity. Many credit granting organizations participate in funding pro-
grams. Some give donations directly; while others authorize GreenPath
Debt Solutions to retain a small percentage of the amounts paid to them
by GreenPath Debt Solutions on behalf of clients on debt management
programs. GreenPath Debt Solutions clients are given full credit for
amounts paid to creditors on their behalf.
Charitable Solicitation #MICS-3048-0790
GreenPath Debt SolutionsSM
2002