Bankruptcy seems like an easy way to get rid of your financial worries, but sometimes that is the furthest thing from the truth. So many people who do file think that this is the way to go so that they can live above their means. These people simply declare bankruptcy to make payments
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It seems, the fact that someone has to pay for their over-indulgences does not matter. The only thing that matters is that the – sometimes greedy – filers live the high life, without paying full price.
Some people do genuinely need help because of circumstances beyond their control — such as illness, loss of wages, death, fire or some other disaster. Exorbitant loans that you get to sustain a lifestyle that is meant for the rich does not qualify as a valid reason to declare bankruptcy.
After you find that you cannot meet the payments of the loan, filing for bankruptcy is not the answer. The answer most likely is — do not get the loan in the first place. Scale down your spending habits now, so that you will be more prepared for the future.
What made it so inviting for people to file in the first place was the terms and conditions of bankruptcy. Chapter 7 allows you the privacy of not revealing your income and the debts are cleared by turning over a small portion of your assets. There are several exemptions — (although, not 100%)
Some of the Exemptions are;
* Home Equity – more, if both spouses file
* Household Items, and more.
When you file Chapter 13 you are required to reveal only your regular income and this income is used to repay only a small percentage of your debts — as little as 10 Cents on the dollar down to a mere one penny on the dollar.
Whether you file Chapter 7 or Chapter 13, it is not necessary for you to prove your financial difficulties. The fact that you are filing is your proof and this proof allows you to wipe out your outstanding debts and keep a large portion of your assets.
To add sugar to the icing, the law forbids a business or person who has filed for bankruptcy to be – legally – labeled as such. Debtor is the lawful term to describe a person who has filed for bankruptcy.
What you also need to know is that the bankruptcy stays on your credit record for 10 years and the only way you can pay your debts (concerning the bankruptcy) after you file for bankruptcy is through the courts.
Because of all of the abuse, the Federal Bankruptcy Act of 1978 Bill was passed. Thanks to the Bill, bankruptcy laws are now changing and they will probably change even more as time goes
So, the question is Should You File for Bankruptcy?