Bankruptcies

In times of economic turmoil, Americans have turned to Chapter 7 debt elimination bankruptcies for hundreds of years to aid their households recovery from emergencies or allow a fresh start should budgetary matters have gone awry. However, after recent changes to the United States Bankruptcy Code, bankruptcies are now far harder for ordinary citizens to attain based solely upon the amount of money that they have made over the last few years. The Bankruptcy Abuse Prevention and Consumer Protection Act, signed into law by President Bush in 2005, stipulates that the court trustees only deem those bankruptcies legitimate if the individual or couple filing for Chapter 7 bankruptcy protection made less the median income of their state in the year before the bankruptcy declaration. This means that the bankruptcies of hard working men and women, saving for their families’ future, could be automatically rendered null and void (no matter the extent of their credit card debts or medical bills) just because they had one fortunate period before the worst patch of the current recession!

Among the many additional deterrents that borrowers find when looking into bankruptcies, there’s a new risk residing in the latent possibility of criminal prosecution should an error or oversight occur within the bankruptcy paperwork required at the initial stage of the application process for bankruptcy protection. Bankruptcies now require reams of documentation, and, if any aspect of the paperwork should be found by the analysts paid by the government to peer through the bankrupcty petition and creditor matrix to be erroneous (whether by accident or planned fraudulence), the borrowers would not only lose their chance at the bankruptcy protection but could even face criminal charges.

The perils of criminal prosecution from improper attempts at bankruptcies become even greater if the petitioners’ funds are in any way suspected by the courts to be mismanaged. Obviously, despite the temptations, every potential applicant for bankruptcy protection knows not to lie on the official documentation about their income sources or any potential assets (though, with the new bankruptcy legislation changing the designation of property, that could be difficult for ordinary citizens to evaluate as well), but there’s a laundry list of specifically prohibited acts which could prevent bankruptcies from proceeding to discharge. Gifts to relatives, prioritized payments to creditors, even prospective tax refunds or civil suits unreported could lead the trustee to withhold bankruptcies from the most deserving of families.

Experienced bankruptcy attorneys should effectively counsel consumers on how to bend the new regulations and ensure that they competently report all of their income and assets while still managing to avoid losing their possessions through Chapter 7 debt elimination, but, as previously mentioned, only the poorest Americans can now hope to qualify for Chapter 7 bankruptcies (and they wouldn’t likely have the funds the lawyers demand). In response to the limitation of modern bankruptcies, many borrowers are instead searching out debt relief alternatives such as settlement negotiation. The debt settlement negotiation companies work with their clients on budgets that could enable them to pay back the worst of their bills while also, by guaranteeing to the lenders that the clients won’t attempt to file for one of these bankruptcies, managing to cut down the balances currently owed. These debt relief techniques – of which, settlement negotiation is generally considered the best – may not be as effective as the bankruptcies enjoyed by past generations, but, with things as they are, they might be some borrowers’ last opportunity for help.

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?

Avoid Bankruptcy

Debt Relief

Bankruptcy is not your only option! Our goal is to help you determine the right course of action for you to take. We will connect you with a debt settlement company today that will help you avoid filing for bankruptcy protection.

Are your finances spiraling out of control? Get the information you need today to stop harassing creditor’s phone calls. Total Debt Relief provides a matching service to connect you with pre-screened Debt Settlement Professionals. These debt management pros will educate you on all of the options available to you to get out of debt. Total Debt Relief helps you make the most informed decision possible so that you can get your financial life back on track.