Bankruptcy Is It The First or Last Option for You - Bankruptcy Reviewed

By: Jimmy Wilson
Submitted: 2007-01-17 16:17:29
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Bankruptcy is a very misunderstood process and it has been a hush-hush subject for so many families facing financial difficulties. Once you understand your options, you can better decide what choice you should make.

Bankruptcy in simple terms is a defined as utter failure or impoverishment. This keyword, failure, in terms of bankruptcy is often times associated with a person's total demeanor and should not be. To merely fail at anything is a measuring tool for a specific function or test. You can fail a test and yet pass the subject, as in a school subject or class. Bankruptcy is no different in comparison.

In our current economy one doesn't have to look far across the masses of middle class America and see cases of bankruptcy plaguing our nation. Bankruptcy is evolving into a more accepted state of our financial affairs. While most people are still devastated by the mere mentioning of the word 'bankruptcy', it is your American privilege to choose this option and reset your finances and begin anew.

Bankruptcy is often driven by health issues that become overwhelming or a job loss that was unexpected. Even in the case of death, of the main breadwinner of the family, bankruptcy is a viable option. When we look at other factors that drive Americans into a financial failure and bankruptcy is the best choice, we find that our mere financial institutions are geared toward causing a significant number of individuals into an unfortunate choice of bankruptcy.

Credit card companies are so enticing to want to assist you in extending credit where you can purchase now and pay later. The most un-talked about details of these creditors is how they manipulate your terms of repayment, interest rate adjustments, and default clauses.

When you sign up for a credit card, the whole dimension of your finances turns further away from your control and into the hands of a creditor's fast figures and small type clauses. Bankruptcy is in one sense, the retaliation against an aggressive credit driven monopoly. Granted we'd all like to reset our financial portfolios and begin fresh, knowing the mistakes we've made. Choosing bankruptcy does have some negative effects but the decision to choose bankruptcy should be looked at with your overall gains and losses.

When the current economy was beginning to see that the credit card companies were suffering more cases of bankruptcy, the credit card companies quickly saw a need to make changes to their credit agreements and repayment policies. In the recent past, credit card companies were allowing card holders, to pay such a small minimum monthly payment, that did not allow for a reduction in their next month's balance statements, the credit card companies were actually allowing themselves to reap a near 100 percent capture for interest. This was a sweet deal for the major credit card companies. You were basically on the hook and couldn't get away from this never-ending cycle, without paying off the balance in full or at least making significant payments to reduce your balance.

Along comes the D-day for credit card companies, default increases became rampant and the bankruptcies were beginning to take a reverse effect on the credit card companies bottom line. What the credit card companies chose to do in order to reset their financial positions, was to raise the minimum payment required, to supposedly keep card holders from getting in over their heads financially. What actually occurred was a second wave of bankruptcy cases. Those card holders caught in the transition of having a high credit card balance and a new higher minimum monthly payment were forced to consider bankruptcy almost immediately.

For the short term, bankruptcy cases would solve the card holder's dilemma, so in steps the government, to alter conditions of bankruptcy laws. In an attempt to reduce the number of bankruptcy cases, the laws changed to make it more difficult for individuals to file a Chapter 7 type of bankruptcy. This is the type of filing that totally eliminates any repayment toward the bankruptcy or their creditors. It almost appears there was a joint effort between creditors and the government to balance the economic conditions that come to a head.

In conclusion, it is this writer's thinking that bankruptcy is not the evil demise of an individuals choice to elect bankruptcy if every effort to resolve debt has been considered. To file bankruptcy should be not your first or last choice but to evaluate your options and with a clear understanding of how one becomes financially strapped and to learn from it in a way that you can make better financial decisions in your future. Whenever a creditor is offering you a good deal, the creditor always gets the better end of the deal. Avoid overspending and live within your means. If your means won't support your desired level of living make changes in your means, not in your extensions of credit.

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