Bankruptcy and Society

The Phoenix bankruptcy lawyers at Want A Fresh Start know the prospect of filing for bankruptcy in Arizona can be troubling for some. Court-mandated financial assistance can sometimes carry a social stigma that may make the decision to file for bankruptcy a difficult one, no matter how respectable the reason. This, however, is nothing more than a collective misinterpretation of the system. Bankruptcy stands in stark contrast to state-assisted programs, such as welfare, in almost every imaginable way.

Bankruptcy Is an Old Institution

Far from a new mode of caring for citizens, bankruptcy was established by the United States government in the 1800s as a way to protect those in serious debt from the inevitable destitution that can follow financial ruin. This legislation, called The Bankruptcy Act of 1898, aimed to provide a fresh start to debtors and strike a balance between the rights of the debtors and the rights of the credit companies. As society has grown, more allotments have been made on the side of the debtors, but the process itself has been mandated by the federal government as a form of relief for over a hundred years.

The Potential for Bankruptcy Is Built Into Creditors’ Business Models

Far from a surprise, each credit company is well aware of the risk for bankruptcy from its credit card holders. Credit cards have become increasingly easy to obtain because the companies financially benefit from extra exposure and participation, even with the percentage of people who default on their payments. It would be possible for a creditor or bank to only lend money to those who are completely without risk, but this would decrease their potential scope greatly and thereby limit their earning potential. While creditors are certainly not seeking those who would file for bankruptcy, they are not actively avoiding them either. If you have accumulated extreme debt on your credit cards and are having trouble making payments with your current income, you may wish to speak with a bankruptcy attorney in Phoenix, AZ.

Bankruptcy Limits the Power of Creditors

Were there no process for getting away from excessive debt in Arizona, many would work for much of their lives solely to repay what they owe. By enacting protective measures such as bankruptcy, the government can place a certain amount of power back into the hands of debtors and prohibit collectors from harming the livelihood and well-being of those affected.

Bankruptcy Does Not Affect Taxation

Many complain of the cost of bankruptcy on society as a whole. In one sense, they are correct. Higher numbers of bankrupt individuals mean higher interest rates; however, there is no additional tax imposed on citizens to compensate for bankruptcy. A bankruptcy case stands between an individual and their creditors, so governmental spending is beyond its scope of influence.

Most Filing for Bankruptcy Exhibit Serious Need

The percentage of people who have found themselves considering filing for bankruptcy because of frivolous spending is extremely low. Most people taking this step have debt they have accumulated from medical expenses, employment difficulty beyond their control, or a costly divorce. Our Phoenix bankruptcy attorneys realize this and are here to help individuals regain control of their finances.

Moreover, bankruptcy rates fluctuate along with the economy. A recession or depression sends bankruptcy soaring through no fault of the citizens affected. While there are some who may attempt to take advantage of the system, most looking into bankruptcy are in serious need because of circumstances that fell outside of their control – and their budget.

Filing for Bankruptcy Is a Positive Step

For those looking to better manage their finances, there are a myriad of options. Filing for bankruptcy in Arizona is a proactive way to take charge of your finances and to rebuild yourself in the wake of a crippling debt. The stigma surrounding bankruptcy is waning as more is understood about it, and more and more legislators and citizens are recognizing the benefits it can offer. Contact a Phoenix bankruptcy lawyer at Want A Fresh Start to consider your options.