Unfortunately the path that our legal system has taken in recent years to provide debtors with a discharge from their debts has led many individuals to believe that it is no longer safe or wise to file for bankruptcy. As a result, numerous persons are afraid of filing for bankruptcy, and others believe that it is not worth the risk. In addition, bankruptcy attorneys have become rarer over time. Many bankruptcy attorneys are afraid to even take on new clients and some have difficulty finding clients at all. This is affecting the quality of work that they can render and many persons are being forced to file for bankruptcy even when they do not really need to do so. Some of the reasons for this are:
* The Bankruptcy and Debt Relief Act of 1996 (BDCPA) has severely limited the options available to debtors. One of the most significant limitations includes a cap on the interest rate at which a debtor can recover part of his or her debt. Currently, the median credit card debt in the United States is nearly $10,000. This means that most American debtors will probably never be able to recover a full percentage of that debt, if they ever did recover any part of it at all. As a result, many debtors are choosing to file for bankruptcy even when they do not need to do so. In short, the Bankruptcy and Debt Relief Act have literally gutted the ability of debtors to discharge their debts in federal court. You can read more about Bankruptcy and Debt Relief or see this bankruptcy counselling agency.
* Bankruptcy and Debt Relief is presently being pushed by creditor's through the use of "debt forgiveness" schemes. Debtors are often unaware that debt relief plans allow creditors to wipe out past due balances even if the debtor does not request bankruptcy protection. Essentially, these debt slaves are being offered a deal by creditors to avoid the necessity of bankruptcy for them by paying less than the full amount due. This is obviously a losing proposition for both the debtors and the creditors.
* Bankruptcy and Debt Relief is not just about the current situation for the debtor and creditors. It also has far reaching effects on the economy as a whole. When the economy is in shambles because one half of all American citizens is in financial distress, it is the actions of these individuals that create the economic ripple effect. Ultimately, every American citizen is affected when the economy as a whole is in shambles. When millions of people are unable to pay their debts and default on their loans, other industries suffer without customers. As the ripple effect continues to play itself out over the course of years, the overall economy will fall into disrepair.
* Bankruptcy and Debt Relief is not a legal loophole or an exception to the bankruptcy code. It is an alteration to the bankruptcy code passed by Congress. Once this law changes, creditors cannot simply wash their hands of a defaulted loan and declare the debt collection process over. A future court may invalidate the entire law suit as well. Continue reading more on this here: https://www.huffpost.com/entry/bankruptcy-advice-_b_985298.
