Bankruptcy Basics

By Heather Faucher | Posted on September 16, 2009 | Filed Under Bankruptcy 

Bankruptcy was created to benefit both debtors (consumers or businesses who owe money to others) and their creditors (a person or business who is owed money) by making sure that debtors get relief from debts that they truly can’t afford to pay, as well as ensuring that creditors get paid from any assets that the creditor doesn’t need to live on. In 2005, the U.S. Bankruptcy Code was modified to make it more difficult for debtors who can afford to pay off at least some of their debts to file for Chapter 7 bankruptcy, which forgives most if not all of a consumer’s debt. Instead, most of these debtors are required to file for Chapter 13 bankruptcy, under which they re-pay most or all of their debts under a 3 to 5 year payment plan.

So, how do you know whether you’ll need to file for Chapter 7 bankruptcy or Chapter 13? Read more

Bankruptcies on the Rise…

By Heather Faucher | Posted on July 22, 2009 | Filed Under Bankruptcy 

Both consumer and commercial bankruptcy filings are racing upward again and are expected to reach a stunning 1.5 million this year, according to a report from Automated Access to Court Electronic Records (AACER). While that number may still be below the record of 2 million filings hit in 2005, it’s still a sharp increase over last year’s 1.1 million filings.

A serious bankruptcy reform measure was signed into law in 2005, which seemed to stem the tide of bankruptcy filings over the next year. The law was intended to curb bankruptcy abuse and make it harder for people to simply erase their debts. The plummeting economy is swinging the bankruptcy pendulum back up, however. Rising job losses, tighter credit, dwindling 401(k) accounts, and dwindling paychecks means consumers are struggling even more than ever to make ends meet and keep creditors at bay.

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Beating the Bankruptcy Boogie Man

By Heather Faucher | Posted on June 4, 2009 | Filed Under Bankruptcy 

For many people, bankruptcy is just as scary to contemplate as the boogie man or monsters lurking beneath the bed. Sometimes, they have valid reasons to be reluctant to even consider the possibility of filing for bankruptcy. Other times, they’re just jumping at shadows or rumors meant to scare them back underneath their financial blankets.

Here are some common misconceptions about filing for bankruptcy:

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