Surprising Benefits to Consumer and Business Bankruptcy
In many cases, the minute people decide they need to see a bankruptcy attorney,
feelings of disgust, hopelessness and embarrassment come to mind; they
think they've hit rock bottom. However, bankruptcy often brings hope,
not regret. It can be the beginning of a new life for so many individuals
and small business owners in this country.
Many people who have filed for
Chapter 13 bankruptcy or
Chapter 7 bankruptcy will admit that they felt relief because they were no longer weighed down
by an enormous debt load. But filing for bankruptcy protection doesn't
only provide emotional relief for debtors. Debtors can take away tools
and information to help them make future financial decisions.
In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection
Act, requiring mandatory financial and education counseling to individuals
who file for bankruptcy. Debtors who file bankruptcy attend educational
sessions that show them how to save money each month, cut down on unnecessary
expenses, set financial goals, and manage bills.
According to a study conducted by the University of Illinois and Money
Management International (MMI) that surveyed 4,000 bankruptcy filers in
various stages of the bankruptcy process, the counseling requirements
appear to be helping debtors.
Angela Lyons, the University of Illinois economist who administered the
study, says that the counseling offers "viable mechanisms" in
helping debtors understand and improve their financial behaviors. She
claims the study revealed that the counseling improved debtors' ability
to make financial decisions not only in the short-term, but also in the
Ivan Hand, president and CEO of MMI, stated, "As a bankruptcy counseling
and education provider, we believe it is our responsibility to ensure
that our programs are successful in empowering individuals and families
to build future financial security."
Many small business owners who contemplate filing for
business bankruptcy feel the same as consumers drowning in debt - embarrassment, hopelessness.
Many even see a bleak future. However, according to a report released
by the U.S. Small Business Administration that used data from the National
Survey of Small Business Finances, small business owners actually are
more profitable post-bankruptcy. It's true that many face loans with
high interest rates, but the study shows that new or reorganized businesses
can and do perform financially better than competitive businesses who
have never filed for bankruptcy protection.
If you are overburdened with enormous debt, speak with an experienced bankruptcy
attorney. Your bankruptcy lawyer can advise you of both the direct and
indirect benefits to filing for personal or business bankruptcy and how
it truly can offer a "fresh start."