Bancruptcy Relief for Consumers
Bancruptcy is a frequent misspelling of the word, ‘bankruptcy’, but both mean financial devastation. Simply thinking about going bankrupt stirs up a host of emotions for most people and can range from shame and anxiety to fear and stress.
Ironically, when wealthy businessmen and celebrities file bancruptcy, few people give it another thought. When the average citizen seeks bankruptcy protection, society perceives them as a failure. Why is it acceptable for people of status to benefit from laws meant to protect everyone, but a strike against those who need financial help the most?
Millions of Americans are facing mammoth financial challenges. Between unemployment, economic recession, increased cost of living, and subprime lending practices, U.S. citizens are having a hard time making ends meet. Many people have no other option but to file bankruptcy in order to escape financial bedlam.
Although bancruptcy can help debtors reduce outstanding debts, most Americans are unacquainted with the new bankruptcy laws that went into effect in 2005. Known as the Bankruptcy Abuse Prevention and Consumer Protection Act, BAPCPA requires debtors to repay debts by establishing a Chapter 13 repayment plan.
Bankruptcy chapter 13 plans requires debtors to contribute debt payments on a monthly basis. Chapter 13 payments are usually submitted to the bancruptcy Trustee who disburses funds to creditors until debts are fully paid.
Occasionally, bancruptcy judges require automatic payroll deductions to satisfy chapter 13 payments. Employers are not legally allowed to terminate employees filing for bankruptcy protection, but most frown on court ordered payroll deductions. Not to mention is can be embarrassing for employers to know about personal finances.
One of biggest disadvantages of chapter 13 payment plans is a large percentage of debtors fail out of bankruptcy within the first year. If debtors do not comply with the terms of their bancruptcy payment plan, creditors are allowed to petition the court to request dismissal. When bankruptcy cases are dismissed, debtors lose court protection and creditors can move forward with collection actions including repossession and foreclosure.
It is important to explore all debt reduction options before filing for bancruptcy protection. Several bankruptcy alternatives exist which can provide the same results without the level of financial harm caused by chapter 13. The most common alternatives include budgeting, credit counseling, debt consolidation and debt settlement.
If bancruptcy is the only option it is imperative to work with an experienced bankruptcy lawyer. BAPCPA requirements are difficult and confusing. One wrong form or missed deadline could put a stop to obtaining necessary financial protection. Don’t run the risk of have your bankruptcy petition dismissed because of inadequate legal representation.
Investor and author, Simon Volkov, offers solutions to individuals facing bancruptcy and foreclosure. Simon provides a comprehensive personal money management article library which provides information and resources about personal bankruptcy options. Learn more by visiting Article Source:http://www.articlesbase.com/personal-finance-articles/bancruptcy-relief-for-consumers-1762006.html
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