Debt collectors might suggest that individuals who owe credit card debt could be sent to jail. However, Michigan residents who are struggling to pay current or past due balances generally don’t have to worry about being taken into custody for not paying what they owe. In 1833, the federal government outlawed debtors prisons. Furthermore, individuals typically have the ability to file for bankruptcy to discharge credit card and other unsecured debts.

It’s important to note that creditors can file lawsuits against debtors in an effort to obtain what they are owed. Creditors who obtain judgments against debtors may be able to garnish their wages or take money out of their bank accounts. Failing to respond to a lawsuit will likely result in a default judgment in a creditor or debt collector’s favor. There are several ways that individuals can avoid a creditor lawsuit or other collection activities.

Those who have good credit might be able to consolidate existing debt balances at a lower interest rate. It could also be possible to work with a lender to have a debt balance partially forgiven or reduce the amount of interest paid on an existing balance. Bankruptcy is generally a last resort available for individuals who can’t afford to make even minimum payments on a regular basis.

In most cases, credit card debt balances are eligible to be discharged in a bankruptcy proceeding. An exception may be made if certain tax or student loan balances are paid off with a credit card. An attorney could help a debtor learn more about the bankruptcy benefits, such as obtaining an automatic stay against creditor collection activities. This may prevent creditors from filing a lawsuit or repossessing a debtor’s property.