Seattle, WA (PRWEB) April 30, 2012
Integrity Law Group, a Seattle law firm, knows that filing for bankruptcy is a life changing decision not to be taken lightly. Consulting with a qualified bankruptcy lawyer is crucial to deciding whether filing is ultimately the right choice. Unfortunately, emotions can play a large role in the decision, obscuring the positive aspects of the bankruptcy option behind dark clouds of doubt and shame.
The penalties, fees and perceived stigma of bankruptcy can be a lot to take on, but when looked at objectively, can sometimes be the obvious decision. Despite these burdens, however, there remain important reasons behind offering a bankruptcy option for overextended individuals. These reasons can be grouped into three major categories, each of which produces positive effects for both the individual and the economy.
Helps the Individual to Get Back on Track
Whether it is through financial missteps or unfortunate circumstances, filing for bankruptcy is a chance for debtors to heal financially. Filing Chapter 7 allows debts to be eliminated by relinquishing, or liquidating assets. As long as they meet income requirements and pass the required Bankruptcy Court’s Means Test, individuals can hit the reset button on their economic lives upon finding the right bankruptcy attorney to assist them. Chapter 13 is more of a scheduled payment plan that can save some assets, but like Chapter 7, is an important tool for those with no mathematical chance of repaying their ever increasing debts.
Helps Lenders be More Flexible
As bankruptcy filings have increased since the economic downturn, the leverage that lenders hold over their debtors has decreased. Creditors only really make money by keeping customers in debt to them for as long as possible. Bankruptcy breaks that connection by instantly eliminating debt. That is why lenders are resorting to pursuing a healthier relationship with their customers by offering them their own repayment plans. This can benefit the lender by recouping money they would normally never see and by creating a long-lasting, empathetic relationship with their customers.
Helps Expose Flawed Economic Policies
The policies that legislate lending practices seek to find the proper balance between product value, debt interest and income possibilities. When credit lines are extended to individuals with incomes that have very little chance to repay the loan, especially with exorbitant interest rates, then the economic system begins to crumble. A rise in bankruptcies is a leading indicator for policies that promote predatory lending, especially with products that are virtual necessities. By having the option to file for bankruptcy, it allows the system to expose practices that will eventually prove self-destructive.