The Economy Is MAin Cause of Personal Bankruptcy Increase
With the way the economy is at the moment where everyone is struggling to make ends meet, more and more people are facing the writing on the wall of declaring personal bankruptcy. With credit cards, loans, unexpected financial losses, even crime, declaring personal bankruptcy is something that about one million people are now facing each year. One of the biggest problems is a credit card. It seems so attractive in the beginning and often useful for certain services such as movie tickets and hotel reservations. However, problems arise when people are not aware of what they are spending and do not pay the full amount off at the end of each month. A simple rule of thumb applies here and it is that if you don’t have the cash, then you shouldn’t be spending it. Prevention is better than the cure if you understand these basic rules. It might not be too late to get out of your financial problems but if it’s too late having to file bankruptcy might be your only option.
A chapter 7 bankruptcy begins with the debtors filing a voluntary petition, schedule of assets, schedule of liabilities, schedule of income, schedule of expenditures, and other related documents on behalf of the debtor. Since 2005, you must also meet the Chapter 7 bankruptcy means test. The means test places a limit on those who can file a Chapter 7 bankruptcy based on income level. The amount of debt or the solvency or insolvency of the debtor does not determine eligibility for a Chapter 7 bankruptcy. There are also limits based on prior bankruptcies and a requirement for mandatory pre-filing credit counseling
