An ounce of prevention may indeed have once been worth a pound of cure, but, for most borrowers in Missouri (according to the recent statistics available about the ever growing consumer debt loads held by citizens of our state), any traditional measures regarding household financial management will no longer be fully effective in the liquidation of unsecured debt burdens once they have arched past a certain amount. While, admittedly, no one could ever have anticipated the sharp decline in the economy of the United States and, in particular, Missouri nor understood how swiftly the corrosive effects of this decline would directly threaten Missouri residents, many of our state’s households could have originally avoided the uproar of stubborn debt problems that, to a great extent, resulted from the habitual purchasing of luxury goods and the accompanying rise in unsecured credit balances throughout our state. Easy enough for the ordinary Missouri consumers to imagine themselves victims of the current recession wiping out real estate values throughout St. Louis and every town and city of Missouri even as it bumps up the unemployment rate to levels unseen for generations. The reality is, this day and age, it’s become genuinely more difficult for Missouri households to avoid unnecessary financial burdens – such as medical bills or lost wages due to job termination – than eschew credit while continuing to exist in a society frankly fueled by spending far above budgetary means. Nevertheless, that should be no excuse for Missouri borrowers to ignore the destructive inevitabilities of compound interest or put off learning more about all of the different methods of speeding up the repayment of credit card accounts. More than anything else, there’s no reason why any Missouri borrowers should have access to only the superficial (and largely false) knowledge of Chapter 7 bankruptcy protection that most consumers of our state seem to possess.
Alongside the recession scouring financial markets across the planet, the occurrence of Mississippi borrowers filing for Chapter 7 and Chapter 13 bankruptcy protection has skyrocketed in recent years even though so few borrowers actually understand much of anything about the program. It is a statement to the remarkable consumer confidence of Missouri residents that, while they continued to accrue massive amounts of credit card debts for generally less than enlightened reasons, they effectively avoided learning detailed information about the potential solutions for debt relief including the most theoretically famous one of all: Chapter 7 debt elimination bankruptcy. Please appreciate that we do not wish to dismiss the genuine misfortune that caused many unsecured burdens to climb. The lingering economic nightmare has disabled the household budgets of so many Missouri families that have found themselves depending upon credit cards to put food on the table after jobs they’d held for decades vanished in the blink of an eye. Worse still, with the loss of health insurance, many found themselves owing tens of thousand of dollars to a hospital following the illness or accident suffered by a family member. Circumstances such as these were the reason that bankruptcy protection was originally dreamt up and implemented by our fore fathers. However, once credit was made so available to so many members of society that had not yet demonstrated the responsibility for repaying past loans, an unfortunately large portion of Missouri residents blithely spent whenever the opportunity presented itself with the apparent belief that the potential to be offered more credit cards and greater account balances would always be around the corner.
Easy enough to poke fingers now that the economy’s fallen to such a disastrous swoon, but Missouri borrowers – especially the younger residents who’d never known a world without seemingly unlimited credit – just adapted to the changing financial tides and evidently assumed that bankruptcy protection would only be necessary for some other family. However, for Missouri households that have started to realize that they’ll need some sort of help repaying their bills, Chapter 7 debt elimination bankruptcy could genuinely serve as an advisable solution to mounting obligations regardless of the practical costs and eventual risks for those same households. Within Missouri, there are several different types of bankruptcy protections that could be employed, of course, but, except in the case of family farmers, the Chapter 7 and Chapter 13 bankruptcy programs are the only ones that should be of any use to individual borrowers. Furthermore, the Chapter 13 bankruptcy program – since, at heart, it does little more than help organize various debts to simplify payments – won’t be nearly as appealing to any Missouri consumers save those home owners that have reason to believe their personal residences may be subject to foreclosure proceedings. To preserve the family home, Chapter 13 bankruptcy may indeed be considered of reasonable benefit to Missourians otherwise concerned with the security of what’s not only their family shelter but generally the greatest investment that they will ever make, but, even beyond the limited effect of such protection upon the credit card bills and other debts constricting household incomes, Chapter 13 has become a difficult road for any family to walk down. In essence, a trustee chosen at random by the Missouri judicial system will set up a budget that forces the speedy repayment of all secured and unsecured debts according to expenses calculated by the Internal Revenue Service that supposedly averages the day to day necessities of all Missouri citizens. If the trustee happens to be particularly harsh in his rulings or the IRS figures happen to be particularly low when compared to the Missouri household’s actual needs, the family could find that they are simply unable to comply with the bankruptcy courts’ demands and find themselves in an even worse position.
As should seem plain from the preceding passage, your authors do not recommend Chapter 13 bankruptcy protection for any Missouri consumer unless they are absolutely certain that their house may be sold from under them in the very near future and that they have absolutely no other course of action. Chapter 7 debt elimination bankruptcies, for the right sort of Missouri resident, could be far more beneficial. Within Chapter 7 bankruptcy protection, the Missouri trustee will effectively liquidate all of the burdens considered viable targets by the United States Bankruptcy Courts – which, unfortunately, disallows many debts afflicting Missouri households such as back taxes, alimony and child support, debts attached to collateral like automobiles, and all educational loans even if they were taken out through private lenders – in the space of only a few months. The Chapter 7 program has long been the most popular type of bankruptcy protection utilized by Missouri borrowers by a wide degree for reasons that should seem immediately clear. However, after the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, Chapter 7 bankruptcies have been newly restricted to only those residents of Missouri who can effectively claim that they made less than the average income or salary of Missourians in the first half of the year prior to filing for bankruptcy. While the income figures change regularly, of course, and every curious Missourian should contact the United States Census Bureau for an up to date reading of how their own income would compare to the state median income level, this does effectively put a damper on the debt relief hopes of fully half of the state’s residents even though their earnings (as with so many of us recently) may have taken a tumble or their debt holdings might be far greater than even a healthy annual income. With the price of hospitalization through the roof, as just one example, Missouri households could earn six figures yet helplessly watch their medical bills approach even seven figures for the care of a family member.
The financial restrictions imposed by the 2005 legislation may seem even more unfair once Missouri residents curious about bankruptcy realize how integral – and how very expensive – attorneys who specialize in Missouri bankruptcy law have become for even ordinary borrowers within our state. Even from the time that Missouri borrowers approach their county courthouse and request the bankruptcy petition and associated paperwork that will set the bankruptcy process into motion, the advice of experienced lawyers should be seen as not just a help but almost a necessity given the potential dangers lurking within the regulations of the Chapter 7 debt elimination program. Alongside the promise of getting rid of the credit card bills tethering the household budget, after all, Chapter 7 bankruptcy protection could make the physical household quite a bit emptier. Family heirlooms, artwork, pianos, appliances, furniture, motor vehicles, and even the family homestead – provided there’s too much equity present at the time of appraisal – are all subject to forfeiture by the government depending upon the dollar amount of their replacement value, and most average Missouri consumers would have a devil of a time figuring out just what and what is not considered an asset under the language of the US Bankruptcy Code. Now, Missouri has its own set of exemptions that are a good deal more friendly to the working men and women of its state, but, from the outset, bankruptcy filers will have to decide whether or not they plan to choose the Missouri exemptions or the federal ones which can be trickier than it seems for borrowers without a background in bankruptcy law. Worse yet, if the documentation has not been adequately compiled to the judgment of the Missouri trustee, the bankruptcy declaration could be thrown out at any moment leaving the borrower at the mercy of not only law suits and potential wage garnishment by the original lenders but also even criminal penalties for fraud by the state and federal court system.
There are also the credit counseling courses newly required by congressional mandate. Ever since the Bankruptcy Abuse Prevention and Consumer Protection Act was passed in 2005, residents of Missouri – and, for that matter, consumers throughout the United States – will be forced to take and pass a series of classes about debt management before they are even allowed to submit that original bankruptcy declaration, and they will have to take and pass essentially the very same course prior to having their Chapter 7 bankruptcy finally accepted and their relevant burdens discharged. The costs for obtaining a so called diploma from these counseling agencies will differ from company to company, of course, but, since there are so very few programs certified by the United States Justice Department within the state of Missouri for this sort of activity (one cannot just enter any Consumer Credit Counseling firm, sign up for a class, and expect the courts to automatically accept such as proof of educational rigor), they end up charging essentially whatever they wish and effectively gouging the debtors of whom the agencies are confident are least able to afford the inflexible demands. Furthermore, the Missouri borrowers most interested in Chapter 7 bankruptcy debt liquidation are often holding down two or even three jobs and, for heads of larger households, have minimal funds available for child care. This is not even to mention that the more rural Missouri residents may have to travel some ways merely to grasp the opportunity to attend these pro forma and largely pointless obligations. From all accounts, the course work has little more information than would have been available for a personal finance class taught to Missouri middle school children, and it’s hard to imagine that such a prohibitive yet legislated necessity was ever intended as much more than an irritation and extra expense to persuade borrowers from even attempting the Chapter 7 debt elimination bankruptcy solution.
Here again, the advice of a lawyer would seem ideal before starting the Chapter 7 bankruptcy process, but, with the funds that decent attorneys charge for even the first consultation, this can set back ordinary Missouri households more money than they could bear just to learn that bankruptcy’s not a good fit. Before going any further, every Missouri borrower should try to learn all that they can about not only the benefits and drawbacks of bankruptcy protection but also the various other alternatives for the liquidation of unsecured obligations now invoked around Missouri and the rest of America. Debt settlement, for instance, uses the mere threat of Chapter 7 debt elimination bankruptcy to so frighten the creditors who would be affected that the creditors essentially agree to just give up the rights to more than fifty percent of their debts in the most successful of negotiations. There’s a payment schedule inherent to this process, too – though it’s a good sight more friendly to the budgets of the Missouri families than the bread and water rationing forced on them by Chapter 13 bankruptcy programs – but, at the very least, Missourians won’t have to worry about their households being looted by agents of the court nor watch their dearest belongings slide across an auctioneer’s table. Best of all, most of the certified debt settlement counselors offer their own initial consultations free of charge. Since it’s such a new field, most of the debt settlement specialists operate strictly from web sites and telephone calls so as to keep their over heads low, and they pass the savings on to their customers. Missouri borrowers shouldn’t expect to be shown a great deal of specific information about what would happen within the debt settlement program before the potential clients submit their own financial data for careful study by trained professionals, but they should at least get some sort of foundation about how settlement works and whether or not they would be likely to be approved. It may not be as clear and easy a solution as bankruptcy used to represent, it’s certainly not nearly as helpful for Missourians as a tight budget and restrained spending would’ve once been before the bills got out of control, but, this modern world, settlement negotiation seems as good a bet as any to lift Missouri households out of debt once and for all.
The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.
Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?
