Bankruptcy as a Fresh Start

It is VERY common to feel that bankruptcy is a shameful “last resort.” People are reluctant to consider the option, let alone talk about it freely. Generally speaking, bankruptcy should be a last resort, but with the right tools and information, a bankruptcy can help you wipe the debt slate clean and prepare you for a more fiscally sound future.

You may be surprised to learn that bankruptcy is not a disgraceful way out. Protection under bankruptcy law was designed to protect the debtor as well as the national economic order. The government and law makers realized that they would start to lose their tax revenue from an impacting cross section of the population who may seek debt relief by simply not working or working “under the table”.

As an example, when debtors were subjected to wage attachments due to a judgment for unsatisfied debt, it would often force this section of the work force to not work as they stood to possibly gain more assistance from government programs while unemployed or they would seek employment “under the table” so as to not have a legitimate (and tax paying) wage to attach. This scenario is a threat to the financial stability of the whole country because it leads to devastating financial consequences for the national economy.

In order to keep the economic order and provide good people a new start, one which allows for the consumer to still be a viable part of the national economy, the government enacted the Bankruptcy Code, providing protection, under the law, from financial crisis.

Today we are in such a crisis. With the housing bubble burst causing drastic declines in home values, and the subsequent instability of investments from an unsteady stock market, many people have found themselves under a mountain of consumer debt, unable to see a way out. According to the American Bankruptcy Institute, filings rose more than 30% in 2008 as compared with 2007, to 1.1 million. The ABI, a research and education organization, also predicts filings are likely to increase by another 35% this year, 2009.

If you are considering Bankruptcy, talk to an attorney. Find an attorney who specializes in consumer bankruptcies because The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has made filing far more complex. This act was passed after heavy lobbying by credit-card companies and other lenders as a protection from fraudulent and abusive bankruptcy filings. Under the new law, you must prove that your financial straits are truly dire. To qualify, you’ll have to provide more proving documents and meet stricter more specific standards. A Bankruptcy attorney will help you navigate through this process and provide you with the tools you’ll need to make a fiscally sound fresh start.

If you are facing a seemingly insurmountable financial crisis, you are NOT alone. Exercise your rights under the law for protection. Seek a no-cost consultation with a licensed bankruptcy attorney. Filing Bankruptcy does not have the negative stigma it once held. Many people, from all income levels, have sought protection under bankruptcy. It is OK to talk about your situation; you may be surprised how many people you know are in the same boat but are unaware how to find relief or a lasting resolution. You have the right to rebuild your financial foundation. You have the right to a new beginning.