After six months delinquency in paying your mortgage, credit card bills, car loan, student loan and other types of loans, your creditor bank will be forced to consider your account as bad debt. This will make (your bank) refer your account to a collection agency, the job of which is to make you or your business firm pay whatever it takes (which is often through harassing tactics).
Millions of Americans suffer too much stress and worry due to overwhelming debts which has already become impossible for them to settle. Many run why or quit their job after being humiliated by collection firms. Well, obviously, they have not heard of, or are just too afraid to try resolving their problem through, Bankruptcy.
Bankruptcy is the U.S. government’s way of helping business and individuals save themselves from overwhelming debts to have a brand new financial start. To file Bankruptcy is to legally declare an individual’s or a firm’s incapacity to pay debts.
The US Bankruptcy Code law has different Bankruptcy chapters, each designed to address an individual’s or a firm’s specific financial situation. Chapter 7 bankruptcy law or liquidation bankruptcy law, for instance, provides for the selling of certain assets and/or properties by a court-appointed trustee. The proceeds will be used to pay off non-dischargeable debts (which are usually government-related) with the remaining amount to be returned to the owner of the property and assets.
There is also Chapter 13 bankruptcy law or Debt Adjustment plan, wherein the court requires debtors to design a three-year debt-payment scheme, making payments more affordable. Besides allowing debtors to keep their properties, this chapter also lets them continue with the operation of their business.
There are other bankruptcy law chapters, such as chapter 11(also known as business reorganization) and chapter 12 (which is designed for families whose farming or fishing business produces a regular annual income). The beauty of bankruptcy is, it will not only enable you to legally settle your debts; it will also erase some of your debts which are not protected or dischargeable.