February 23, 2018

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Archives for September 2011

Why Bankruptcy

Why, indeed? Some insights into the reasons for filing bankruptcy — presented by an attorney specializing in the practice of bankruptcy.

A local attorney specializing in the practice of bankruptcy was kind enough to provide us with this insightful look into some of the reasons that bankruptcy filings are once again climbing.

Ever been to a third world country? If you have and are perceptive, you will notice that people there don’t have close to the consumer goods we take for granted.

There is a good reason for that — NO CREDIT! If you don’t have the funds you can’t buy — it’s that simple in those places.

As a result, those economies are a fraction of the size of ours.

Without credit, our economy would collapse overnight. No cars would be sold or built, no houses purchased. So, credit has made the U.S. economy. Take it away and we have no economy. Debt is a way of life here.

However, there are drawbacks, including the temptation to live beyond one’s means.

Also, the creation of an extremely materialistic society and excessive rates of interest — once against the law and called usury — now out of control due to greed; moreover, if the creditors are largely foreign controlled corporations there are real hostages to the future with possible consolidation of power in a few banks.

Bankruptcy is the valve on the pressure cooker without which the lid would blow and we would have already had several revolutions by this time, with maybe no economy left in the rubble.

So, in this country, we allow excessive greed in the form of outrageous interest on loans and exorbitant fees for services, but with a pressure valve. That valve is called Bankruptcy.

As a result, the federal government has allowed people to get rid of their entire debt in a legal process called Bankruptcy.

Most commentators state that you must give up your assets in exchange for relief from your debt.

That is misleading. Most people who file bankruptcy give up little or nothing.

Those who have assets they don’t want to give up can file a Chapter 13 bankruptcy and generally make a small monthly token payment and get out of the lion’s shared of their debt.

Others with lower incomes can declare Chapter 7 and get out of their debt by turning over a tax refund or such like.

Many times people struggle for years to try to pay back unreasonable service or credit card debt. Probably, if the truth were known, the debtor has already paid what they originally borrowed.

For instance, that sack of groceries that was charged a year ago has already been paid back two or three times considering the interest.

Many folks don’t use credit cards as an alternative to cash. For most, it’s an expensive way to just make ends meet.

If that’s your case, just get rid of it. Don’t pay for years only to find that when you look at the balance still owed, it has only gone down a few dollars for the hundreds that you have paid.

There is no virtue in continuing to pay on debt you have rightly paid or to pay for services already paid by an insurance company.

Bankruptcy is a legal procedure to rid yourself of all that.