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Bankruptcy and Debt - How to Become Debt Free

Bankruptcy and debt are often interchanged as being synonymous terms, but they are not the same. A bankruptcy is an action of declaring an individual or business insolvent, resulting in its liquidation and repayment of all loans and other assets owned by the declared insolvent. For most countries, bankruptcy is the immediate step when there is a negative balance on a bank account, and no longer any means through which to meet expenses or repay debts. In the United States bankruptcy is a process through which a nonresident alien who has become a citizen of the United States can file for bankruptcy protection if such protection is needed.

The evolution of modern society s views toward bankruptcy and debtors, through Western history, follows a pattern of gradual evolution from an overtly criminal, quasi-piratical approach to debt relief to today's more enlightened, socially conscious approach that recognizes the societal importance of providing debtors with a discharge of their debts. The original thoughts regarding bankruptcy were that it was an action that was taking away wealth from the wealthy and giving it to the poor, in the hope that this would alleviate poverty and lead to economic growth. The perception of the wealthy as having the monopoly of irresponsibility in the way of spending and borrowing, resulted in the extension of the punitive measures that were intended to punish those who were unable to control their finances. For many years, this resulted in a system where those unable to pay off their debts were reduced to a state where they would be forced to do credit card shopping on the very eve of ruin, and bankruptcy was seen as the most effective method of eliminating this threat to the orderly economy. Find top Bankruptcy and Debt counselling services or find the right bankruptcy attorney.

Bankruptcy laws have changed over time and have now been modified to help provide debt relief to debtors while protecting creditors from undue harm. For example, many states now have statutes of limitations that prevent creditors from claiming undue or deceptive debt compensation claims after an applicable period of time has passed. In addition, many states now require creditors to inform their clients about any changes in the debt agreement that may affect the debt recovery process.

Bankruptcy law also now makes it far easier for debtors to become self-employed. Under the new bankruptcy laws, all debts of the non-working spouse are separated, unless the debtor is able to prove that s/he will be able to continue earning a living through working. This means that if a bankrupt spouse wants to start a business or pursue an education, all of the non-essential debts must be cleared first. Although this may not seem like a benefit, it is one that virtually all consumers are grateful for. The absence of debts being connected to an unemployed person makes it much easier to clear debts that otherwise might have been problematic to clear.

Finally, there are programs that offer debt forgiveness to debtors. Debtors can elect to have their debts forgiven if they can demonstrate to the court that their income and/or other financial necessities do not currently meet the requirements necessary to pay all of their creditors. Usually, the debt forgiveness program works to reduce the overall debt of the debtor so that s/he may be able to afford an acceptable lifestyle. In some cases, there are even programs that enable debtors with extreme hardship to qualify for debt forgiveness.

Of course, there are many more benefits that most debtors are aware of. However, if you are in debt and/or thinking about filing for bankruptcy, it is often best to consult with a qualified bankruptcy lawyer. A bankruptcy attorney knows the law and can help you understand whether or not you are eligible for debt forgiveness. You can read more on this here: ​

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