Bankruptcy Can Be An Economic Stimulus For Those In Serious Debt

Over the past few years most Americans have heard of all the bailouts that banks are getting. Even going further than that the federal government came up with a stimulus package to supposedly stimulate the economy but all it did was give the money to large corporations for their pet projects without creating any jobs at all. Right now in 2011, the US still has an employment rate of 9.2% nationwide. That doesn't seem like the economic stimulus did anything for the citizens of the United States. Most Americans are buried under a mountain of credit card debt, waiting for a job so they don't have to file for bankruptcy. In most cases, if these individuals wait too long, filing bankruptcy won't even help.

When it comes to debt, the statistics speak for themselves, the average American household has $20,000 in credit card debt. That's a lot of money when you consider that $20,000 is also six months salary of the average American household. Most individuals don't realize that they will probably never be able to pay this debt down. With interest rates up around 21 to 26% for credit cards, people in this situation usually can barely make the minimum payment. This is why filing bankruptcy might be the only economic stimulation that these folks will ever get. This federal government does a lot of talking, but when it comes down to it they're not paying your bills.

It's only common sense to take a look at your finances and see that unless you win the lotto you'll never be able to pay this off. All you have to do is write down all your bills to create a budget and figure out if you never charged on the credit cards ever again how long would it take you to pay them off. If it's over six years, the odds are against you. When you're facing this kind of situation it's time to go speak with a bankruptcy attorney to see if bankruptcy can help your current situation.

There are two main chapters of bankruptcy for individuals. These are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is the most common and is king for an individual or family that has a large amount of unsecured debts like credit cards, medical bills and payday loans. Filing Chapter 7 bankruptcy will wipe out all of these debts and if the debtor has no secured debts there is a chance that they will come out of bankruptcy being debt free. This sounds like a pretty good stimulus package if you ask me. On the other side of the fence, Chapter 13 bankruptcy is best for people who are trying to protect their property from being lost to foreclosure. In a Chapter 13, the debtor has their bankruptcy attorney create a repayment plan that will last 3 to 5 years. The Chapter 13 payment plan is based on the amount the debtor can afford with secured debts being paid for and all others be paid if something is left over. A Chapter 13 bankruptcy allows the debtor to keep their property while getting caught up on back payments.

The beautiful thing about bankruptcy is once the bankruptcy attorney files a petition with the court, the creditors can no longer bother the debtor's to collect on the amount owed. People that are struggling paycheck to paycheck and in many cases unemployment check to unemployment check to get by, don't need extra pressure from nasty creditors demeaning them. Don't wait for economic stimulus from the government to rescue you, bankruptcy might be the only boost you'll ever get.

The author started FilingBankruptcyNow.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

Chapter 13 Bankruptcy and Foreclosure

The foreclosure rate in the United States has reached a pandemic level. There have been millions of foreclosures over the past few years. The number of these foreclosures has shattered annual records. So high is the number of foreclosures that levels such as this have not been seen since the Great Depression. This certainly leads many to wonder what can be done to forestall an eventual foreclosure if not outright stop it. There are certainly no easy answers or solutions to such a problem. However, it is possible that foreclosure actions may be stopped if you were to file for Chapter 13 Bankruptcy.

What is Chapter 13 Bankruptcy and how does it work as a means of stopping foreclosure?

Chapter 13 bankruptcy is usually the second option for those that wish to file for bankruptcy. Usually, when they are unable to file for Chapter 7 bankruptcy, they will look towards Chapter 13 as the second option. The purpose of Chapter 13 bankruptcy is to reorganize debts and their repayment structure. In particular, the person in debt has the option of being able to make debt repayments over a period of three to five years. However, such a chapter of bankruptcy cannot be ordered by the courts unless the person filing has a steady source of income. Such an income must be present during the entire duration of the designated repayment period.

The reason for this is obvious. If you do not have a steady source of income then you will be unable to make your payments which would turn the whole bankruptcy proceedings into little more than an exercise in futility.

The way Chapter 13 bankruptcy relates to foreclosure is that it is likely the court will order an immediate stay on foreclosure actions at the filing. Actually, the court could order a stay on all collections of secured debt including your car or other such things you may be in arrears on.

This DOES NOT mean your debt to the mortgage holder will be discharged. You will only receive a short stay in which to set up the court ordered payment restructuring plan. The immediate stay will allow for a buffer zone period where the debtor will no longer be in a situation where the stress of meeting massive monthly obligations has to be met. For those whose expenses far exceed what they are earning per month, this additional stay of obligations could prove enormously helpful on many levels.

There will come a time shortly after the stay of foreclosure has been issued where the debtor will have to make new payments. However, the courts and the attorneys will aid in setting up an agreeable payment restructuring plan that may help set the stage for being able to handle all future monthly foreclosure payments.

Ultimately, there is no easy way out of a situation involving foreclosure. However, when you have sought protection under the laws of Chapter 13 Bankruptcy, you can make the process a lot easier than it would be otherwise.

The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

Many Are Filing Bankruptcy Because Of Credit Card Debt

Over the last few years the topic of foreclosure has gotten a lot of press. What's funny is, there hasn't been much said about large amounts of credit card debt that Americans have today. Credit card debt is probably the number one thing that causes more bankruptcy filings than anything else. Usually, when a debtor gets behind on their house payments and ends up in foreclosure, the underlying reason is a debtor was juggling their credit card bills alongside of their household expenses. In today's society, the idea of having a credit card is not an option. People don't realize that it is possible to live without a credit card.

Once people get addicted to swiping the plastic, it seems like it is impossible to break. The addiction to credit has become a huge problem in this country today. Nowadays, in this world of I want it now and I can't wait, people don't understand how before credit, our parents used to live. In the past, there used to be layaway plans that the individual would go to the store and make payments until it was paid for and at that time they would get to bring it home. Working and saving up for something for a period of time makes you appreciate it all the more once you get it.

Over the last 30 year's credit has become a new way of buying stuff. Corporate America has made it to buy it now and pay for it later. In many cases, by that time the item charged is paid for, it's probably not even used anymore. It's no wonder that last year alone there were 1.6 million individuals filing bankruptcy in the US. It's easy to let credit card debt burn out of control when left unchecked. Lately, with unemployment pushing 10% many people have been forced into living on their credit cards. At some point there will be nothing left on the cards to spend and the debtor will be forced into filing bankruptcy to eliminate the debt.

Many people that are buried under a mountain of bills feel bad about filing bankruptcy on their credit cards. They feel that it is dishonest to not pay the bills that they promised to pay. This is all pretty noble, but when you consider that choice of feeding your family or paying your credit cards, I think feeding your family is more important. Once you stop paying your cards the debtor will see that the creditor is not your friend. They will turn on you like an angry lion. When the creditor starts filing lawsuits garnishing the debtor's wages, they will quickly change to filing bankruptcy on their debts. Just ask any bankruptcy attorney and they will be able to explain the debtor, creditor relationship. If you consider that years of interest that was paid on the account you will understand that they are not your friend.

After making the decision to file for bankruptcy it's important to get the help of a bankruptcy attorney that has experience in your personal situation. Having the help of a bankruptcy attorney to navigate the complexity of the law will eliminate a lot of the stress that filing bankruptcy creates.

The author started FilingBankruptcyNow.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.