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Bankruptcy in America
Bankruptcy in America
Bankruptcy is also referred to as liquidation. Bankruptcy can eliminate credit card debt, stop creditors from calling, and eliminate certain liens.
Bankruptcy Statistics
In 2005, 2,690,000 people filed for bankruptcy in the United States. As of June 2005, 1,604,848 of the bankruptcies filed were non-business related, and 32,406 were business related. In 1980, approximately 300,000 filed for bankruptcy. Over the course of the past 25 years, bankruptcy filings have steadily increased. The average age of most bankruptcy filers is 38 and 44% of bankruptcy filers are couples.
Types of Bankruptcy
There are several types of bankruptcy. Chapter 7 bankruptcy allows the courts to eliminate the debt you currently owe. Chapter 9 bankruptcy allows cities, towns, and municipalities to liquidate or reorganize their debts. Chapter 11 bankruptcy is used by commercial businesses who want to reorganize their debt and repay creditors while maintaining their current business operations. Chapter 13 bankruptcy allows individuals with regular income to repay their debts to creditors over an agreed upon period of time. By doing this, individuals can avoid complete liquidation of their assets.
Discharged Debts
The amount and type of debts that are discharged depend upon the type of bankruptcy you file for. Some debts cannot be discharged by filing for bankruptcy, which means you will have to continue to make payments on them. These debts include spousal support, child support, taxes, and student loans. In rare cases, student loan debt can be discharged, but you must prove that you are incapable of paying back the debt, and this is usually very hard to do seeing student loan repayment terms are so flexible.
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