Bankruptcy comes in chapters, as I’ve been explaining this week in these Bankruptcy in Indiana articles, because the different types of individual and business bankruptcy are named after the chapters of the U.S. Bankruptcy Code in which each is detailed.
So how is the “Chapter” system working? Well, at the five Zuckerberg bankruptcy law offices, where we’ve been offering help to stop foreclosure, payday loan debt help, student loan debt help, and Indiana bankruptcy help in general to tens of thousands of people, we’re proud that both bankruptcy Chapter 7 and bankruptcy Chapter 13 have provided a chance for a fresh financial start to many, many of those people.
But is the bankruptcy system a perfect one? Of course not. Harvard Law School Visiting Professor Katherine Porter points out that “2 in 3 Chapter 13 bankruptcies end without plan completion and discharge”. But, after conducting a series of phone interviews with actual debtors who had dropped out of their Chapter 13 bankruptcy plans, Porter learned that many of the debtors had accomplished their goals without completing the full bankruptcy plan.
Some had negotiated with their creditors and received some modification or workout plan.
Some had filed to help stop foreclosure, but had either decided to forfeit the home or been able to work out a mortgage modification.
I discussed this article with one of my Columbus, Indiana bankruptcy lawyer colleagues, and she had noticed that, regardless of whether debtors had filed bankruptcy Chapter 7 or filed under Chapter 13 bankruptcy law, they had all benefitted from the automatic stay which had “bought time” for debtors to plan without harassment by bill collectors. Even if they later failed to “complete” the entire debt repayment plan, her clients reported that filing individual bankruptcy or small business bankruptcy in Indiana had helped their situation.
Steve Rhode, the “Get Out of Debt Guy, has other ideas. He believes that “a successful outcome is one in which the consumer was able to obtain legal relief from their debts with either a fully completed Chapter 13 repayment plan or a Chapter 7 discharge.” On the other hand, Rhode (who went bankruptcy himself in 1990), concludes that, “while bankruptcy does cost money, it is generally much less expensive than debt settlement services, and the majority of people resolve their debt when turning to bankruptcy as a solution.”
Bankruptcy does, in fact, come in chapters. But, as I’ve always said, the important thing is it comes in CANs!
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg