Kansas Debt Relief

As a recognizable consequence of the tremors rumbling throughout the American economy, rising unemployment figures and crippling the stock market, many Kansans have been trying harder than ever to relieve their debts. Unfortunately, much as we appreciate their passion for regaining household financial stability, debt relief for Kansans has become remarkably more difficult for ordinary borrowers to achieve without a good deal of stress and deprivation. While bankruptcy may still be the primary debt relief solution that Kansas consumers try once they realize that their debts have grown out of control, there have been quite a few changes to the United States bankruptcy code over the past few years. Even before the 2005 legislation was enacted, however, your authors found that most Kansans didn’t know much more about bankruptcy debt relief programs than that they were intended to aid borrowers in their struggles against credit card companies and other lenders. Before any Kansan borrower attempts governmental protection, they should make sure that they learn all that they can about bankruptcy so that they and their families may make an informed decision. Within the following article, we will attempt to explain a bit more about the bankruptcy process – both Chapter 7 debt elimination bankruptcies and the increasingly popular Chapter 13 debt re-organization bankruptcy programs – as well as the ways in which modern bankruptcy does not adequately serve the debt relief parameters of many Kansan households regardless of their demonstrable needs. Further, we will discuss some of the other debt relief maneuvers that have come into play recently and see whether or not they could be a better match for Kansas borrowers at this moment despite our state’s long history of treating debtors with compassion and allowing them a fresh start from unmanageable burdens.

When folks around Kansas speak about bankruptcy – whether from passing comments or even through playing Monopoly or other board games – they’re largely speaking only about Chapter 7 debt elimination bankruptcy programs. However, through the evolution of the bankruptcy code over the past few decades, quite a few different Chapters have been set into law which unfurl debt protection from different entities from family farms to (though this is obviously more rare) actual cities. For the consumer debt relief purposes of Kansas borrowers, however, they will likely only be concerned with the Chapter 7 and Chapter 13 programs. Chapter 11 bankruptcy could also be employed for individual Kansans and their families, but this sort of protection comes at a high price and wouldn’t be worth the trouble for all but the wealthiest borrowers. Chapter 7 bankruptcies, once again, have generally been found to be the most attractive of all debt relief strategies because ideally all of the Kansas borrowers’ unsecured debts will be legally eliminated. However, this sort of protection has always come at a price. In theory, after Chapter 7 debt relief bankruptcy has been declared, the Kansan borrower’s property becomes part of a bankruptcy trust, and their possessions will be rendered forfeit to the discretion of the Kansas courts who will auction all applicable assets for eventual remuneration of the creditors in order of a pre-determined prioritization set up within the national bankruptcy code (secured lenders, holding such debts as home mortgages and car loans, go first and so on). This has become even more of a threat in recent years following the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act which formally changed the way that Kansas bankruptcy applicants would file their initial petition when looking to find debt relief for themselves and their families.

Fortunately, even though bankruptcy may no longer be a dependable form of debt relief, the unending engine of capitalism has developed different alternative with which Kansan consumers can successfully rid themselves of unneeded and unwanted credit obligations. Debt consolidation, ever since the mortgage industry’s implosion and the loss of property value seen across the state of Kansas, has become considerably less popular among enlightened borrowers. With home equity so very hard to sustain in these days of plummeting real estate values, consolidation loans – no matter how low the interest rates that mortgage loan professionals offer may seem – could be very treacherous for borrowers that end up defaulting, and, even in the best of circumstances, the debts will not actually be relieved but instead just extended over twenty or thirty or even more years in which compound interest will continue to add on to the amounts Kansan borrowers will one day be forced to pay back . Worse yet, there’s another hidden problem to consolidation mortgage that loan officers tend to dismiss during but which could thoroughly hamstring Kansas families’ best efforts toward a true and sustainable program of consumer debt relief. Considering that most Kansan borrowers who are first considering consolidation loans are overwhelmed first and foremost by their credit card bills (new studies indicate that the average Kansas household owes more than twelve thousand dollars in unsecured debt balances on just over eight separate credit cards), borrowers absolutely must keep in mind the temptation that equity consolidation engenders. With their credit card balances suddenly eliminated and their overall monthly payments precipitously lowered thanks to the decades-long terms of consolidation equity loans, Kansan families that previously displayed problem spending habits would be hard pressed to avoid falling into the same buying patterns which inevitably led them to need debt relief help in the first place.

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