Is Bankruptcy Really a Fresh Start?
Today, many people are in so much financial debt that it is impossible for them to pay their debt as well as the general cost of their living expenses. Many are blaming September 11th for their financial whose; however, their spending habits have always existed. Many feel like there is just not enough income coming in to support their lifestyles; jobs are being cut like never being before. Credit card companies are issuing credit cards like never before. If one is not cautious, they will have the "charge it" mentality which gets them in a financial jam further down the road. Then, when they have maxed out all of their credit cards; they are left with no other choice but to file Bankrupt. However, is bankruptcy a fresh new start? Webster defines bankruptcy as to reduce to a state of financial ruin or utter failure or impoverishment. Bankruptcy can also be defined as a legal proceeding in which an individual cannot pay his or her bills can get a new financial start. There are four types of bankruptcy cased provided under the law. *Chapter 7 is known as straight "bankruptcy or liquidation." *Chapter 11 is known as "reorganization" and is common among businesses.
*Chapter 12 is reserved for family farmers. *Chapter 13 is known as "debt adjustment."
Although there are four types, the most common ones are Chapter 7 and Chapter 13 which will be discussed in this paper. In a bankruptcy case under Chapter 7, one files a petition asking the court to discharge their debt. The basic idea in Chapter 7 bankruptcy is to wipe out one 's debt. It does not involve the filing of a plan of repayment. There is no property which is non exempt that one can sell to pay creditors; all unsecured creditors are paid nothing. On October 17, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 make it difficult for one to file Chapter 7 Bankruptcy. One may not file bankruptcy
*Chapter 12 is reserved for family farmers. *Chapter 13 is known as "debt adjustment."
Although there are four types, the most common ones are Chapter 7 and Chapter 13 which will be discussed in this paper. In a bankruptcy case under Chapter 7, one files a petition asking the court to discharge their debt. The basic idea in Chapter 7 bankruptcy is to wipe out one 's debt. It does not involve the filing of a plan of repayment. There is no property which is non exempt that one can sell to pay creditors; all unsecured creditors are paid nothing. On October 17, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 make it difficult for one to file Chapter 7 Bankruptcy. One may not file bankruptcy
References: www.planabudget.com www.bankruptcyhome.com www.arnopol.com/CM/BankruptcyFAQs/BankruptcyFAQs1.asp www.bankruptcy-courts.net/