Thursday, November 8, 2007

A Final Resort

As I've recently started using credit cards all the relevant information is of great concern to me. Just yesterday I found out that bankruptcy, which is the last resort for debtors to get relif from unmanageable credit card debt, is very actively misused.
To be more exact, debtors, who actually can affrod repaying the debt, try to go under Chapter 7 of the Bankruptcy Code instead of Chapter 13 where they would have to undergo a 3 to 5 year repayment plan. Under Chapter 7 they save their exempt property and do not repay any debt!
Is it really legal or should this be prohibited?
How are the cost covered for credit companies? At the expense of lower income families?

1 comment:

cognitivefun said...

Bankruptcy is overused by people who don't understand two things.

One, they will probably have to make payments for years on their old bills.

And two, it doesn't let you keep your car or your house if you can't afford the payments on those.