American Bankruptcy
What is our main purpose in life it is to be happy or to be successful:
It is worth mentioning in this regard that for a lot of people, there is no difference between the two. If experts are to be believed we seem to define ourselves by what we own instead of who we are, as if success makes us better people. Theoretically speaking some people go to such extremes to be successful, that they end up neglecting their marriage, their children and even their health. On the other hand for some people, illegal activity is worth the risk, it if brings them the success they want.
In an ideal scenario even when people have success, it's not enough, now they need to show the world how successful they are. More often than not they do this by buying expensive homes, cars, clothes, etc. Fact of the matter is there's a lifestyle that goes with success and many of people try to project that style, even if they can't afford it. But always remember that no matter how successful people may get, they can't avoid the unexpected circumstances of life. It is worth pointing that people can get ill, have accidents or because of cut-backs, lose their jobs. There is no hiding the fact that those types of situations can destroy the finances of most people. Thats why, the question now arises: What are the options for when their income and unexpected circumstances will not allow them to continue to live a certain lifestyle
Though there is no denying that people have a few avenues that maybe open to them, the process that many use to help fix their finances is bankruptcy. In simple terms, Bankruptcy is when individuals or an organization legally admits to not being able to pay their bills. It is worth mentioning in this regard that Bankruptcy allows the people in debt a chance to get their bills in order, without going to the extreme of selling everything they own. In an ideal scenario during bankruptcy, some debts may no longer need to be paid; while a plan to pay other debts will be put into place.
Believe it or not bankruptcy is nothing new. As a matter of fact the first bankruptcy law was created in England in 1542. On the other hand the first American bankruptcy law was passed in 1800. In simple terms, the American law was similar to the British law of 1705, with the exception being that there was no possibly of death, written into the American law. Because of this reason Congress re-worked the bankruptcy law in 1938; one of the changes that came from this was the creation of Chapter 13. According to experts under Chapter 13, the people in debt would make regular payments to a trustee, who would in turn, pay off the people who were owed money. There is no denying that Chapter 13 was a big change, because in the past people would file under Chapter 7; and under Chapter 7, most people got away without having to pay-off any of their debts.
Believe it or not Bankruptcy can be a very important tool for people who've experienced an unexpected trauma in their life. In addition Bankruptcy can help them get back on their feet financially. As a matter of fact it can also help those people who chose to spend more money than they had, usually with the help of credit cards. Always remember that Bankruptcy is not just for the individual. Fact remained that many businesses have taken advantage of the bankruptcy law over the years. It is worth pointing that the bankruptcy law is there to help, but what individuals and businesses should consider, is trying to find a way to live their lives and run their businesses in a way to avoid bankruptcy.
It is worth mentioning in this regard that the bankruptcy Abuse and Consumer Protection Act was passed in early 2005 with the overwhelming support of the President, both houses of Congress and the major credit card companies. Furthermore the law, which created sweeping changes in American bankruptcy law, was passed in order to reduce the possibility that consumers with heavy debts might avoid choose to avoid paying them by seeking debt relief through the courts. In simple terms the Act has many provisions, but the one that may hurt consumers the most was the one provision that was intended to help the requirement that debtors undergo mandatory credit counseling before filing for bankruptcy.
If experts are to be believed, on the surface, the requirement seems to be laudable. In theory few people ever receive any sort of formal money management training, so a bit of counseling, even as bankruptcy approaches, might help debtors avoid further financial trouble in the future. In an ideal scenario the law was passed with the intention that, once educated, consumers would stay out of bankruptcy court in the years to come.
Point to be noted in this regard is that it hasn't worked out that way, and the bankruptcy law is largely to blame. Fact remained that the law did not set a fee for this required credit counseling, but a fee of $50 was suggested and consumers who cannot afford to pay the fee may ask to have it waived. In addition only certain nonprofit counseling agencies would be approved for pre-bankruptcy counseling. There is no denying that these requirements have resulted in a mess in the counseling industry that benefits virtually no one. Furthermore it is worth remembering that relatively few agencies have been approved; the ones that have are very busy. Moreover the suggested fee of $50, when paid at all, is not enough to cover the costs of keeping the agencies' offices open. On the other side of the coin consumers are ending up getting their "counseling" via the Internet, or a conference call, or in a large group meeting. Believe it or not this sort of thing may satisfy the requirements of the law, but it isn't helping the people it was intended to help.
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