Personal bankruptcy the end result - article about Personal bankruptcy the end result

Personal Bankruptcy: The End Result Of Running Up Uncontrollable Debts

Profile Of A Person Sure To Declare Personal Bankruptcy

The main profile of a person that files for personal bankruptcy seems to be, according to economists’ survey, blue collar workers or a person with a high school qualification and who is the sole bread winner in the family, though who has used credit beyond limits. However, there are bankruptcy laws that have been established to protect both parties and which provide equal as well as fair means to satisfy both parties’ objectives.

Thus, because of these bankruptcy laws, a debtor is able to make a fresh start in life and the creditor gets to be repaid in a timely manner to the extent that the debtor can clear off his or her debts.

Before filing for personal bankruptcy, you can choose from two different structured plans that are the Chapter Seven and Chapter Thirteen bankruptcies though more than seventy-five percent of personal bankruptcies are sure to be Chapter Seven bankruptcies, because this type of personal bankruptcy requires you to liquidate all of your non-exempt assets and then distribute them to the creditors.

If you go in for Chapter Thirteen bankruptcy, there is no need to liquidate your assets; instead, you need to agree to a set plan for repayment under which some part of unsecured debts need to be paid and the remaining part of your debt is waived off. However, there are certain debts that are not eligible for bankruptcy protection, either in Chapter Seven or Chapter Thirteen bankruptcy and examples of these include government student loans, alimony, child support as well as income tax debts, which must be repaid in full.

Worried that the increasing levels of debts could harm the national economy, the government has of late, made some pretty sweeping reforms to the bankruptcy laws including the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 that aims to make filing for personal bankruptcy harder through use of various means and ensure the financial health of the nation and its profligate debtors.

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