Is Bankruptcy Appropriate For You?

By Bob Tremerituus

In these tough economic times, companies have sprung up offering “easy” ways to get you out of debt without going bankrupt. They are often, one feels, playing on people’s fears. They make it sound so easy and concentrate on what it would be like to be “debt free”, usually accompanied by smiling and relieved looking spouses or girlfriends.

These adverts usually fail to advise the individual that they may also be “freed” from the majority of their assets.

These advertisements often focus on the freedom from stress bankruptcy supposedly provides, rather than presenting a balanced view to reflect the fact that bankruptcy will cost you dearly.

The fact of the matter is, these companies make money from helping people choose a particular course concerning their financial matters. Bankruptcy is made to look easy and socially acceptable, which in many ways it is these days. However, it should be avoided if at all possible.

However, sometimes, things can come to a head to such an extent that bankruptcy is, in fact, the best option. It doesn’t always mean you lose all your possessions either.

If you are finding that your short term financial position is almost impossible, for example you don’t have enough money to meet your bills, but there is something in the near future that will ease your situation, then a chapter 13 bankruptcy may be the best option.

Chapter 13 is ideal for businesses and some individuals earning a regular wage. It is effectively a repayment plan, where the court steps in and reschedules the debt repayments, which are spread out over a 3 to 5 year period. Unlike the more common chapter 7 bankruptcy, there is no forced sale of assets

Most difficult thing about a chapter 7 bankruptcy is that one is left with virtually nothing. Whilst it is perfectly true that any outstanding debt is no longer the responsibility of the debtor, the debtor has basically lost all their possessions in the process.

The 2005 Bankruptcy Abuse and Consumer Protection Act makes it compulsory for every chapter 7 applicant to be means tested. This is to ensure that all debtors are paid as far as possible, and if the court finds that the applicant can, in fact, under a repayment plan, pay all their outstanding debt, chapter 13 will be enforced.

In the light of the above, one can perhaps see that bankruptcy is no easy option. Quite apart from the possibility of losing one’s home and possessions, one’s credit rating is destroyed. This can make it extremely hard to rebuild one’s financial credibility and therefore bankruptcy should be avoided at all costs.

Bankruptcy is never easy, no matter what you might see on TV. Bankruptcy also has long term implications. However, if you want more free information on bankruptcy, especially chapter 13 bankruptcy law visBankruptcy www.chapter13bankruptcylaw.net.

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Topics: Bankruptcy | Comments Off

Tags: Bankruptcy, cash, Credit, credit cards, going broke, income, insolvency, liquidation, money, wealth

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