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					Title:
Top Factors Influencing Bankruptcy


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453


Summary:
The term Bankruptcy is derived from the Italian word banca rotta, meaning broken bench. It is a federal
court process designed to help consumers and businesses eliminate their debts or repay them under the
protection of the bankruptcy court. However, there are specialized units for bankruptcy in each federal
district court. Under the Federal Bankruptcy Act, these district courts take care of the bankruptcy filings and
other functional procedures.


Factors Influencing Bankru...



Keywords:
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Article Body:
The term Bankruptcy is derived from the Italian word banca rotta, meaning broken bench. It is a federal
court process designed to help consumers and businesses eliminate their debts or repay them under the
protection of the bankruptcy court. However, there are specialized units for bankruptcy in each federal
district court. Under the Federal Bankruptcy Act, these district courts take care of the bankruptcy filings and
other functional procedures.


Factors Influencing Bankruptcy:
The following factors seem to influence bankruptcy, in general. But a combination of all these factors is
however found to have greater impact on Bankruptcy.


1. Rising Unemployment: Unemployment or sudden loss of job is a key factor influencing bankruptcy. In
order to maintain an optimum standard of living, unemployed people are more prone to taking debt without
the ability to pay back. Thus accumulated debt level rapidly increases resulting into Bankruptcy.


2. Broken Marriage: Rising divorce rates are seen to have influenced the number of bankruptcy filings. This
is because in most cases one or both the parties suffer financially due to legal separation. Divorce rates are
almost 50% now, thus, if divorce is being considered, take note of this fact!


3. Credit Card Usage: The more the number of cards, the more will be the amount of debt. With the increase
in the number of accounts used by each adult, the rate of filing bankruptcy also increases. Research shows
that the most number of people who are in debt are young adults between the age range of 25 to 30. This is
the age of 'Credit Card Spending', which is spending more than their income. Before 30 years old, they are
already in debt.


4. Debt Income Ratio: Debt :. With the rise in debt-income ratio, rate of filing bankruptcy also increases.


Your Outstanding Debts
A bankruptcy may not necessarily dissolve all of your debts. Some types of debts may be exempt from
bankruptcy like alimony, maintenance, child support, educational loans, taxes, including income, property,
withholding, and employment taxes, fines, penalties, or forfeitures payable to the government, some
punitive damages, and debts based on fraud.


How to Overcome Bankruptcy?
After knowing the main factors influencing bankruptcy, you must try your very best in avoiding these mine
traps. You must, at all cost, avoid bankruptcy as it does more damage to you than you can imagine! One
main problem most people encounter after declaring bankruptcy is difficulty in getting new employment.
Regardless of what the law says about discrimination against personal bankruptcy, but in real life, these
people do face many challenges and discriminations.


If you have financial difficulties now, take the next step in solve them but getting a debt consultant. Debt
consultants are experts in debt reductions and can certainly help you regain a stable financial footing.




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posted:3/15/2012
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