The Facts About Personal Bankruptcy
by: Jay Stockman
The thought of personal bankruptcy is very frightening, however over 5.4 per 1,000 people have filed for bankruptcy last year, and this rate has been growing at an average of nearly 7 percent. Researchers have determined that the primary cause of personal bankruptcy is uncontrollable levels of consumer debt oftentimes coupled with an unexpected event, such as a major medical expense not covered by insurance, the loss of a job, divorce or death of a spouse. According to economists? surveys, the classic bankruptcy filer is a blue collar, high school graduate who is the head of a household in the lower middle-income class with heavy use of credit. In order to protect both debtor, and creditor, laws were enacted to provide equal, and fair measures to satisfy the objectives of all parties. The primary purpose of the laws of bankruptcy are: (1) to give an honest debtor a fresh start in life by relieving the debtor of most debts, and (2) to repay creditors in an orderly manner to the extent that the debtor has property available for payment.
There are two types of structured plans for filing for personal bankruptcy, Chapter 7 or Chapter 13.
Over two-thirds of personal filers choose Chapter 7 bankruptcy. Basically Chapter 7 requires the debtor to liquidate all non-exempt assets, and have them distributed among creditors.
Some examples of exempt assets include equity in a primary residence, and a retirement program.
On the other hand, Chapter 13 does not require liquidation, rather a debtor agrees to a specific payment plan, whereby a portion of any unsecured debts is paid, and the balance is forgiven.
It must be stressed, that under both plans, certain debts are ineligible for bankruptcy protection.
These debts include government student loans, child support, alimony, and income tax debt. These must be paid back in full.
Some analysts are concerned that this unprecedented level of debt might pose a risk to the financial health of American households. In an attempt to reverse the increasing trend in personal bankruptcy, the federal government has recently implemented sweeping bankruptcy reform legislation. On March 10, 2005, the Senate passed S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. On April 20th, President Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Bankruptcy Act of 2005). This act makes filing for bankruptcy more difficult through income-means testing, tougher guidelines for the homestead exemption, increased lawyer liability and required credit counseling.
About The Author
Jay B Stockman is a contributing editor for Online Bankruptcy Resources Visit
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Health, Health Care Insurance and Bankruptcy
Health, Health Care Insurance and Bankruptcy
by: Shobhana R. Kasturi
Imagine for a moment that your health has taken a turn for the worse. You need extensive medical attention and expensive treatments. Would you be prepared to account for these medical costs? Or would you or a family member ultimately have to deal with this financial burden?
Surely, you would not want to suffer the consequences of paying big medical bills on your own. This is why health insurance is so important. A Harvard study conducted in 2001 found that medical bills caused half of all bankruptcies. Therefore, you should make sure that you have some form of medical insurance. You should also make sure that your money is well-spent on insurance that meets your needs.
Insurance Provided by Employer
You should feel lucky if you are in the minority of people who receive health insurance through your employer. According to bankrate.com,...
Health, Health Care Insurance and Bankruptcy
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Finding an Alternative to Bankruptcy
Finding an Alternative to Bankruptcy
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Bankruptcy can have serious, long term effects on your life. If you become bankrupt, you may have to give up valuable possessions and property. Your personal finances will have to be investigated, and restrictions will be placed on future investments.
If you have a steady income and a satisfactory credit rating, you may want to consider these four options with less serious consequences.
Loan consolidation with banks
You may be able to combine all of your debts into one consolidated loan with either your bank or another financial institution. A consolidation loan is always a good idea because your interest rate will be lower than the interest rate on your credit cards, and you will only have to make one payment on your loan each month instead of making many different monthly payments to each of your credit cards.
Informal arrangement with creditors
You could attempt...
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Debt Elimination & Debt Consolidation Can Work Together
Debt Elimination & Debt Consolidation Can Work Together
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Debt elimination has always been my goal. But on this day, when I received the bill for the sudden replacement of the clutch in my car, the VISA bill and word that my daughter needed orthodontics for her teeth, how was I ever going to realize my debt elimination goals?
Does that sound familiar? It?s totally frustrating. It?s very easy to log your spending and identify high interest credit cards to pay off, but what happens when there is still more month left when the money runs out?
In the case of our family, debt elimination was only possible when debt consolidation was achieved by drawing on home equity and refinancing the mortgage.
If we had not gone this route, trying to stay on top of huge debt payments is a slippery slope that can very quickly become serious financial stress.
Consider the fact that Americans are declaring bankruptcy at record rates....
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Is Bankruptcy The Right Option for You?
Is Bankruptcy The Right Option for You?
by: Ken Austin
Types Of Bankruptcy
There are two different types of bankruptcy that can be used in most cases.
Each one has a different set of rules and guidelines that you must follow in order to qualify for and get the bankruptcy.
If you are considering bankruptcy, it is important to understand the differences in these types of bankruptcy and to choose the one that best fits your needs and the one that you qualify for.
Chapter 7 Bankruptcy
This is the type of bankruptcy that is most often used by individual debtors.
It allows for an individual or married couple to wipe out their debt by taking property and liquidating it.
The money from the property is then used to pay off the debt that the individual has incurred.
In some states, certain property can be retained.
Only property that is exempt under the bankruptcy laws is eligible.
Bankruptcy > Is Bankruptcy The Right Option for You?
Bankruptcy and Your Credit
Bankruptcy and Your Credit
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Bankruptcy and credit are directly linked to one another.
Credit is how many people run into trouble with their finances, and ironically how they remedy their financial problems at the same time.
Credit availability and the encompassing pressure to maintain a good credit ranking will often allow lenders to form prejudices.
Many times this can make be the difference between receiving, or being denied, a large loan.
When someone goes bankrupt several things take place.
By filing for bankruptcy you acknowledge that you are not able to pay your debts and must be relieved from having to pay off your unsecured debts.
Unfortunately, this relief from debt comes at a price.
Declaring you are bankrupt makes you at risk to creditors.
You are less likely to receive extended credit when you need it, and on top of that you will be charged extremely high interest...
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Finding a cheap loan online can be a very frustrating and time consuming affair. If you are looking for a cheap loan and you don?t know the right places to look then you may become confused and misled. But with moneyeverything.com it?s easy as this is the best place to compare and find the right kind of cheap loans side by side.
In these modern times many...
Bankruptcy
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