Bankruptcy: Financial Failure and Mountains of Debt.
For many Americans, bankruptcy is the only alternative they have to save their financial assets and personal belongings. While most people view bankruptcy as financial failure, nothing could be further from the truth.
Bankruptcy can be traced back to the Old Testament of the Bible. According to Moses Laws, every 50 years all debts are eliminated. Additionally, the Hebrew law of Forgiveness instructs a release of debt every seven years. Unfortunately, this belief has not carried over to Americans and millions of people are facing foreclosure, loss of valuable assets and complete financial ruin
If you are facing bankruptcy, it is important to realize that you are not a failure. Holding onto negative energy towards your self is not going to make the situation any better. In fact, it will only make things worse. However, it is important to take time to assess your financial situation and get a good grasp on what went wrong.
Once you have thoroughly reviewed your finances, the next step is to determine if there are bankruptcy alternatives which can help you avoid filing bankruptcy. These options might include credit counseling, debt consolidation, debt settlement or budgeting.
In 2005, bankruptcy laws underwent significant changes, making it more challenging for individuals to file. The Bankruptcy Abuse Prevention and Consumer Protection Act states, "Americans who have the ability to pay will be required to pay back at least a portion of their debts." The BAPCPA also states that individuals must wait eight years from the date of their last bankruptcy before they can file again.
Technically, bankruptcy is regulated under U.S. Federal laws and governed by bankruptcy courts. However, bankruptcy cases are highly dependent on State law. Therefore, if you are planning to file bankruptcy, you will need to adhere to the bankruptcy laws of your state.
There are six types of bankruptcy chapters including: Chapter 7, 9, 11, 12, 13 and 15. The most common chapters are 7 and 13. In chapter 7 bankruptcy, individuals surrender their non-exempt property to a Bankruptcy Trustee. The trustee sells the property to pay outstanding debts to creditors. Chapter 13 bankruptcy allows individuals to keep their property; however, a repayment plan must be devised to repay creditors within a certain period of time.
Before filing bankruptcy, try to work out a repayment arrangement with your creditors. Oftentimes, they will accept a lesser amount than is owed on the debt, if you can offer them a lump sum cash payment or get back on track in a short period of time.
If bankruptcy is your only option, it's best to consult with a bankruptcy attorney. Hiring a lawyer to handle your bankruptcy case will ensure you file the proper documents and provide you with a better chance of having the court approve your request.
If you are facing bankruptcy or foreclosure, contact Simon Volkov to discover what options are available. Additionally, browse our comprehensive blog article database which provides a wealth of knowledge on bankruptcy chapters, bankruptcy alternatives and debt management.
Published on September 22, 2008 at 02:33 AM