Generally, people consider bankruptcy to be bad. Often time’s bankruptcy is more than an option, it’s a solution. With the help of bankruptcy consumers can solve their financial problems.
The advantages of filing for bankruptcy:
- Bankruptcy is considered to be the most efficient way to cope with financial problems. When you declare bankruptcy, insolvency will give you the opportunity to do away with most your debt. Bankruptcy will provide you with relief while you get rid of this heavy burden that is debt.
- Often times bankruptcy is the only way to protect your house, car, or other property from unsecured creditors on the condition that you don’t pawn your property after. Filing for bankruptcy means not having to worry about creditors.
- Bankruptcy is intended to protect your income. And if your employer wants to lower your salary or your Social Security, bankruptcy will protect your rights.
Bankruptcy can help you to eliminate or transform secured debts. You can find different options in the Bankruptcy Code on how to deal with such loans and creditors. A lot of debt can be reduced or even eliminated and you can extend the time of payment and deal with defaulted debt.
In most cases, a debtor can maintain control of at least one property.
After applying for bankruptcy, people will stop trying to repossess your things. Moreover, you can live in your home while the bankruptcy process and have enough time to find other accommodations in case of a negative outcome. If creditors don’t follow these rules, they will face fines or worse.
At times, with the help of bankruptcy you can escape arrest for nonpayment or debt default. Also with the help of bankruptcy you can regain driving license if your debt is because of a road accident.
After bankruptcy, you have a right to get small loans for reestablishing your credit. Actually, personal loans will improve your credit score. As a result, you could take advantage of this situation and draw conclusions about your failures and mistakes and start a stable financial life.
Some experts say that the number of bankrupts will increase annually. Contrary to their assumption, according to the Federal Reserve Research, people who file for bankruptcy have decrease from 2 million in 2005 to 1.5 million in 2010.
The most common types of bankruptcy:
- Personal bankruptcy for individuals is Chapter 7 and Chapter. 65% of Americans choose Chapter 7.
- Organizations and companies file for Chapters 7 or 11.
In ancient times when the bankruptcy hasn’t existed yet, if a debtor couldn’t pay, he with his family would be taken away in “debt slavery” for 5 years. After appearance of the term “bankruptcy” in some eastern countries, the obligor, who was declared bankruptcy more than 3 times would be sentenced to death.
In fact, the first Statute of Bankrupts was adopted in 1542 by the British. In the United States bankruptcy pertains both to people and companies, whereas in the Unites Kingdom, only individuals can be declared bankrupt because firms acquire other legal forms, such as liquidation or administration. However, according to The Consumer Credit Counseling Service (CCCS), numbers of insolvent individuals has beaten the record and increased by 0.7% compared to 2009, reaching 135,089 in 2010 in the UK. In the United States the term “bankruptcy” refers to companies and people.
People come to England because they want to be declared bankruptcy there because of English “soft” laws. The British government has created favorable environment to grow the economy and for entrepreneurs or small businesses to quickly overcome financial difficulties.
Reasons to declared bankruptcy in the UK:
- Bankruptcy saves you time. So, in less than 12 months, you will be liberated from your debt in the UK.
- Your property won’t be confiscated to repay debt. In reality, you have the possibility to keep all your household items, regardless of their value.
- English bankruptcy laws (particularly England and Wales) are less harsh than in Ireland and other countries in the United Kingdom. It’s no wonder that a vast majority of people go there to file for bankruptcy.
- Since May 29th 2000, if you are declared bankrupt, your pension fund will be secure and won’t be impounded. State pensions are safe as well.
In spite of its bad reputation, bankruptcy can help you to eliminate most of your debt. The number of people who have filed for bankruptcy has surpassed the record in the UK. Most people find that bankruptcy is the most efficient and the cheapest solution of their problems, so they consciously choose it.
Post by Anna Lia.