Avoid bankruptcy - how new laws make bankruptcy less attractive for consumer debt relief

Avoid bankruptcy - how new laws make bankruptcy less attractive for consumer debt relief

Are you troubled with huge amounts of debts and want to get rid of the same as soon as possible? In that case, you must be looking forward to bankruptcy. However, it is advised that you avoid bankruptcy and look forward to alternatives. It is because of the fact that once you file for bankruptcy, you are in huge trouble and these troubles will simply break the financial backbone of yours. It is good that there are new laws in place which ensure that people do not simply file for bankruptcy if they think of doing so. This has also helped the creditors and the whole economy. This is because of the fact that when the consumers file for bankruptcy in increasing numbers, the creditors lose billions of dollars. This loss of money make them financially weak and in turn, the whole economy suffers. This happens because the creditors when lose their money, fail to cover up their costs and they become financially weak. The equilibrium within the organization takes a hit and the whole system becomes unstable. Since the creditors are an integral part of the supply side of the economy, the whole economy will suffer in case the creditors suffer and if the economy suffers, the consumers will suffer.

The Federal government saw this and came up with new laws to prevent massive filing of bankruptcy. According to these new laws, the consumers will have to go for credit counseling and will have to qualify for bankruptcy. To qualify for bankruptcy means to pass the means test. The government has a predefined set of expenditure which is required by the consumers to maintain a minimum standard of living. If the average income of the consumers exceed the defined level of expenditure, the consumers will fail the means test and will have to repay the debt in full. In case the consumers continue to insist on bankruptcy even after failing the means test, they will be sent to the court where the court will order them to repay the whole debt according to a repayment schedule define by the court. This is Chapter 17 of bankruptcy laws.

Also there are new debt settlement laws which state that the creditors who agree for debt settlement deals offered by the consumers will be given access to the stimulus cash which the creditors can use to cover up the expense. Also as a compensation to the loss of interest earning because of settlement, the creditors will be allowed to enjoy tax breaks. It is because of these policies, the creditors opened up for debt settlement and the consumers were attracted more towards settlement. This explains why bankruptcy became less attractive.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.

POST COMMENT

Buying a New Home? Don't Forgo Inspections Machinery For The Textile And Apparel Industry To Create New Market "engine" Wuxi Founded Business invoices – a tool or a money waster? Radiator Panels and Logmakers – Saving Energy the Simple Way Christmas Gifts Extraordinaire! Give A New Kitchen For An Extraordinary Holiday Gift! There Is STILL Time! Improve The Tool, Die Service Life Of The New Method - Cutting Tools, Molds - Metal Industry Energy Use in the Winter Magniwork Ebook Free Download-The power generator is able to work even though you lack solar energy or wind Advantages Of Energy Efficient Homes Energy Conscious Maryland New Homes Benefit Homeowners Eating For Energy Download-Eating for Energy is so considerate that it provides you with some techniques about cooking I needed to advertise to a new crowd, so I started going with digital printing reading Wedding Favors New York What to Look for When You're Buying Your New Plasma TV