The impact this has on county and state governments cannot be underestimated. The increase in bankruptcy filings could eventually have an impact on the ability of counties and local municipalities to collect property taxes, which would then have a degrading impact on their ability to provide services to the county residents, or to increase the cost of those services.
Bankruptcy is the legal recognition that a business or individual has so many debts that they cannot repay them. Most typically, individuals file for Chapter 7 bankruptcy which has the effect of discharging all debts. Sometimes an individual will opt for Chapter 13 bankruptcy, which allows the individual to set up reduced payment arrangements with creditors, often with drastically reduced interest rates on the outstanding debt.
One of the big reasons behind this is the slow and weak housing market. People whose income depends on a moderate or strong housing market, such as realtors, brokers, and construction workers, are left with a lot of debt and no good income stream to allow them to pay it off.
Another problem is the adjustable rate mortgages. In the initial years of the mortgage loan, payments were very reasonable and affordable, but as mortgage holders get further into the mortgage term, the mortgage payment starts to go up, to the point where many mortgage holders can no longer afford the payments.
If you are considering bankruptcy, be sure that you know your legal rights, and also ensure that you have investigated all possible alternatives to bankruptcy. Bankruptcy should be considered as a last resort only, since the effects of filing bankruptcy will remain with you as a huge flag on your credit reports for the next 7 to 10 years. Bankruptcy law is very complex, and you should consult with a qualified bankruptcy attorney to make sure that bankruptcy is indeed your best option.
For more information about the complexities of Bankruptcy and your options, please visit our web site at http://www.bankruptcy-data.com
