Bankruptcy by MarijanStefanovic

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									Title:
Bankruptcy

Word Count:
287

Summary:
The legal provision of bankruptcy, though sometimes misused, is a
progressive and often merciful process. By it, a hopelessly indebted
individual can make an official declaration of financial inability and be
free of obligation. This may be on a temporary or permanent basis,
depending on the degree of insolvency.


Keywords:
Bankruptcy, Types Of Bankruptcy, Filing Bankruptcy, Bankruptcy Laws


Article Body:
The legal provision of bankruptcy, though sometimes misused, is a
progressive and often merciful process. By it, a hopelessly indebted
individual can make an official declaration of financial inability and be
free of obligation. This may be on a temporary or permanent basis,
depending on the degree of insolvency.

With new amendments in US laws, there is little or no social or corporate
stigma attached to filing for bankruptcy. Filing for bankruptcy, though a
matter of public record, no longer means that it becomes a matter of
public knowledge. Effectively, this is an incentive for the bankrupt
party to make another attempt at financial solvency. An individual can
file for bankruptcy under Chapter 7(for irreversible insolvency) or
Chapter 13(for temporary insolvency).

The benefits of filing for bankruptcy include restoration of bank credit
via a secured credit card. This requires a certain deposit to be made,
but a new line of credit can be established within two years of doing so.
Meanwhile, the bankrupt person has assured freedom from harassment by
previous creditors.

The US Congress amended the US bankruptcy code(ratified in 1978) in 2005,
and further amendments were made on October 17, 2005, to discourage the
abuse of the generous provisions available.. In fact, the passing of
these amendments was preceded by a literal stampede on bankruptcy courts
by people hoping to beat their enactment.

Under the revised Bankruptcy Abuse Prevention and Consumer Protection Act
of 2005, (BAPCPA), someone filing for bankruptcy is subjected to
stringent tests to establish genuine insolvency and present income.
Another provision is that people dwelling in any particular state, must
be residents of that state for at least two years to be eligible.
Bankruptcy laws do not provide a shelter against alimony and child
support obligations.

								
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