More People Forced to Bankruptcy

February 18th, 2010 · 10:05 pm @ J. Marshall Hughes  -  No Comments

The number of Americans filing for personal bankruptcy rose by nearly a third in 2009, a surge largely driven by foreclosures and job losses. With the economy in a recession and unemployment at an all time high, people are now turning to bankruptcy to help relieve desperate financial burdens.

The American Bankruptcy Institute¬†reports, “Research by the Federal Reserve indicates that household debt is at a record high relative to disposable income.”

More people are looking at Chapter 7 bankruptcy, which is the most common type of bankruptcy for individual filers. Chapter 7 is basically a liquidation of all your assets that aren’t protected against creditors during bankruptcy proceedings. Chapter 7 is typically filed in a federal court when an individual facing a great deal of debt is unable to pay it.¬† A successful Chapter 7 bankruptcy results in the Chapter 7 debt discharge, which eliminates the filer’s unsecured debt, such as credit card debt, payday loans, personal loans, utility bills and medical bills.

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