|Written by uchenna ihejirika|
A notable outcome of the present economic meltdown in the United States is the increasing cases of chapter 7 bankruptcy applications. This understandably is a product of the mounting pressure and desperation arising from job losses and increasing debts.
With no indication of relief in sight, filing for bankruptcy is fast becoming compelling and attractive to individuals, having exhausted all possible means of staying afloat their pool of debts.
Bankruptcy by simple definition means that an individual or business does not have any means and resources to pay for debts owed and therefore would approach the federal bankruptcy court for a discharge from debt obligations.
Chapter 7 bankruptcy is very common and a preferred option for individuals and businesses in serious debts because of the relative ease of obtaining the court ruling. All it takes is for the individual to complete an application form which is submitted with an application fee payable to the federal bankruptcy court.
Once the application is filed, the applicantâ€™s creditors are by law restrained from pursuing the debtor for payment until the court issues a verdict. Although a bankruptcy ruling nearly in all cases favorsÂ and protects the debtor from harassment from creditors and their agents, the court however decides what assets owned by the debtor would be seized and sold off to enable the creditor recoup some of the debt.
However in the case of an individual, an arrangement could be worked permitting the person to keep some basic assets such a home, car, furniture and other essential personal materials. While the prospects of discharging current debts through bankruptcy application may appear attractive, it is up to the person to ensure that further debt that may result in another bankruptcy application is avoided. It has been proven that people often go right back to borrowing and incurring of debts few years after emerging from bankruptcy.
Whether an individual relapses to borrowing to and debts after bankruptcy is simply a matter of personal and financial discipline. For anybody intending to file for bankruptcy, it is important to be warned that bankruptcy is noted on the debtorâ€™s credit report for 10 years.
This has obvious negative implications not only on the personâ€™s credit history and consequently, ability to secure loans but also the individualâ€™s ability to get or change jobs. This follows the fact employers often are not comfortable employing somebody with a bankruptcy history to positions of financial responsibility.