Impact Of Bankruptcy On The Economy – Why Bankruptcy Laws Changed?
Certain questions were raised when the bankruptcy laws were changed. The main question was, why and for what reason did the laws change? Well, they changed because there was a requirement for them to be changed. The requirements were created by the massive bankruptcy filings which were making the economy hollow from inside. The already struggling recession hit economy was once again hit by the chaos caused by bankruptcy and none of the economic units were spared from flames and fumes.
As the economic meltdown started, thousands and millions of people lost their jobs and they failed to repay their credit card bills and other unsecured loans. It is because of this, they faced serious debt problems. They wanted to get out of all their liabilities once and for all and the only method to do so was to file for bankruptcy. Bankruptcy eliminated 100% of the outstanding that the consumers had and this was what the consumers wanted. The sad factor was that they also suffered of other financial troubles but the scope of discussing the same remains out of this article.
As the consumers successfully filed for bankruptcy, the consumers were total losers as well. They lost the whole of the money that they loaned out to the consumers. This loss was massive considering the number of bankruptcy filings. The creditors failed to maintain financial equilibrium in the organizations. They defaulted with they corporate liabilities. They failed to pay taxes to the government.
It is because of this reason that a massive budget deficit came up and the government felt the heat of the same. This was a complete chaotic situation and the problem of recession was simply augmented. With clutches of recession tightening on the economy, more and more consumers lost jobs and faced the same fate as the others. The whole cycle was restored again and became kind of self sustaining. This forced the federal government to take steps and to stop the increasing number of bankruptcy filings.
Bankruptcy filing laws were therefore, made more stringent and the consumers were required to qualify for bankruptcy. They are now required to clear means test and those who fail are not allowed to file for bankruptcy.
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement. Check out the following link to locate legitimate debt help in your state.
Contact us for free debt advice = 8884442820