Bankruptcy Code

While Chapter 7 and Chapter 13 bankruptcy protection remains among the most popular debt relief solutions commonly looked toward by borrowers in over their heads with unsecured debts, the United States Bankruptcy Code has gone through a number of significant alterations in past years which severely limits the usefulness and availability of these protections for ordinary consumers.  In the summer of 2005, the United States Congress went to work on the bankruptcy code – a bankruptcy code that had largely been in place for almost a century and helped generations of Americans with bills they were unable to pay – and the resulting complexities and contradictions have rendered Chapter 7 and Chapter 13 bankruptcy programs somewhat less than attractive for all but the most desperate of modern consumers.

Following the alterations to the bankruptcy code, even the original bankruptcy petitions aren’t nearly as easy to file as they once were.  Even a few years ago, before the bankruptcy code was pointlessly complicated, Americans petitioning for either Chapter 7 or Chapter 13 bankruptcy would simply pay their money to the county clerk, fill out a few forms, meet with a trustee chosen at random from their state for a few moments, and, presuming the courts recognized that they could not pay their bills, wave them along toward bankruptcy protection and the eventual formal discharge of all private unsecured debts.  Under the new regulations required by the US Bankruptcy Code, the paperwork accompanying bankruptcy declaration has exponentially (alongside the penalties, civil and criminal, for ever minor errors in documentation) and the costs have risen greatly.  Now, before Chapter 7 bankruptcy petitions can even be considered by the state trustee and other agents of the court, the borrowers must pass a series of utterly meaningless consumer credit classes that they’ll have to somehow afford, and this is added to the hundreds of dollars in administrative fees that the bankruptcy code demands.

While these costs stipulated by the new incarnation of the bankruptcy code may seem minimal to some borrowers, the legitimacy of Chapter 7 bankruptcy declarations likely no longer applies to anyone that has ready cash on hand.  While Chapter 7 bankruptcy and the program’s subsequent liquidation of most unsecured debts – though the pertinent debts discharged by Chapter 7 has also been affected by the changes to the bankruptcy code with such household-crippling financial burdens as public and private student loans now beyond the touch of bankruptcy – the protection will only be offered to those Americans who can demonstrate that their gross household income has been less than the average for their state of residence no matter their specific needs or the size of their obligations.

Even for those Americans with enough available funds to pay for the petition and the related charges – not to mention the attorneys whose expertise in navigating the variations of the updated bankruptcy code should be considered more valuable than ever – yet sufficiently poor to qualify for the program, the negative consequence to credit and the more and more likely seizure of property (another casualty of the revamped US Bankruptcy Code: assets are evaluated by replacement cost) should lead borrowers to search out alternatives.  Debt settlement negotiation, while it won’t eliminate credit card burdens as Chapter 7 bankruptcy once guaranteed, does successfully knock off a large chunk of outstanding debts by simply promising the affected lenders that the settlement negotiation clients won’t even attempt bankruptcy, and, once borrowers take a good look at the current bankruptcy code, that’s really not much at all to ask.

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.