Bank finance articles and tips

Even without the existence of Debtors' Prisons, folks facing the decision to legally renege on their debts--i.e. declare bankruptcy or insolvency--still face a huge, difficult decision--to file or not to file for bankruptcy. Here are a few frequently asked questions and the answers....

Studies suggest that the majority of Americans suffering with overwhelming debt know very little about the options available to help. While filing for bankruptcy is a well known option, many people fear it because of the misconceptions that people have heard. In general, bankruptcy can be a great tool to help resolve debt troubles, but it certainly is not the only option available. Before deciding on a plan for debt relief, it is important to review the benefits and risks associated with all of the options available....

What on earth is bankruptcy? The correct answer is complex. Bankruptcy essentially permits people to escape financial problems simply by not paying off certain costs in full and offers individuals a brand new beginning. There are different kinds of bankruptcies....

In general, Chapter 7 bankruptcy will discharge a debtor's pre-petition debts with a few exceptions. One of those exceptions includes debts related to divorce; however, there are some divorce related debts which can be discharged in bankruptcy.

Two of those exceptions apply to domestic obligations. First, debts (a) owed by a debtor to his former spouse, (b) arising under a divorce decree, and (c) in the nature of alimony, maintenance, or support are non-dischargeable under ? 523(a)(5). Second, marital debts that are not support obligations are non-dischargeable under ? 523(a)(15), unless (a) the debtor is unable to pay such debts, and (b) the benefit that the debtor would receive from the discharge would be greater than the harm that the discharge would cause to the non-debtor spouse. Whereas ? 523(a)(15) "requires the Court to review the impact of the obligations on the current circumstances of the parties and consequences of the discharge of those obligations on both parties," subsequent events are irrelevant to the ? 523(a)(5) inquiry....

Although the numbers for those filing bankruptcy has dropped in some areas and gone flat in others, it's obvious that the economy is not recovering. Unemployment numbers have not dropped below 9% in the last three years and some experts are saying that the actual number of those unemployed is closer to 16% or 17%. It's become apparent that there is a possibility of further reasons of the drop in numbers of those filing for bankruptcy might be that people are just too broke to file bankruptcy. After someone has lost their home to foreclosure and been unemployed for longer than their 99 weeks of insurance, if they don't have any property to sell they will become destitute. If only these folks heeded the warnings and were pro active in their decision to file for bankruptcy. Sometimes trying to hang on and thinking that you're doing the right thing by continuing to pay for debts you can't afford bites you in the end....

Chapter 11 of the United States Bankruptcy Code is available to both businesses and individuals to reorganize their debts. However, it is primarily used by businesses and is available to all types of legal entities from corporations to sole proprietorships.

Businesses or its creditors can file for protection under this section of the code when the business is no longer able to service its debt. The benefit is that the debtor retains control of business operations as a debtor in possession.

While maintaining most of the features of other bankruptcy chapters, going this route gives the trustee the power to operate the business. Unless disqualified for cause, the debtor ordinarily acts as trustee while overseen by the court....