One of the harshest urban legends about bankruptcy is the perception that those who file are trying to "game" the system or acting in bad faith to wiggle out of their obligations. Nothing could be further from the truth. Those who file bankruptcy here in Arkansas, and elsewhere for that matter, are almost always industrious, sincere, hard-working people, with a long history of working and paying on time.
There is no doubt that bankruptcy has some downside. In Arkansas and elsewhere, that consists mainly of a perceived devaluation of one's credit and the difficulty of getting future credit. Although that factor does exist, and despite the potential that a bankruptcy may be reported for up to 10 years, there are nonetheless proven techniques for speeding up the process of regaining a top-of-the-line credit rating.
Traffic stops are an abundant source of drug arrests in Arkansas and nationwide. Some criminal defense experts argue that not all of these stops are really for random traffic violations. They argue that, occasionally, the authorities may stop a driver based on drug suspicions and justify the stop by calling it a traffic violation. Criminal defense counsel will look carefully at the circumstances surrounding purported traffic stops to make sure that there was a legitimate reason to make the initial stop and to file ensuing charges for drug crimes.
Earlier this month, a federal grand jury indicted a man with bankruptcy fraud. The charges were based on a failure to disclose to the bankruptcy court an inheritance that was valued at approximately $800,000. In this case, prosecutors claimed that it was more than just a momentary lapse of judgment. They argued that it was an intentional scheme.
It’s a scenario thousands of Americans can identify with. After the housing bubble burst in the late 2000s, home values plummeted. Homeowners found themselves owing more on their mortgages than their homes were worth. Many also had second or even third mortgages, all underwater.
In 2005, the U.S. Congress made changes to the bankruptcy laws that were intended to cut down on the number of filings and to restrict relief in some situations. Nonetheless, most consumers in Arkansas and nationwide would qualify for effective Chapter 7 or Chapter 13 relief today despite the changes that were made. However, one type of relief that was effectively stymied since 2005 has been the ability to discharge student loans in a bankruptcy.
In Arkansas and all other states, it is not quite true that student loans cannot be discharged. One expert who did a statistical study reported that 40 percent of requests to discharge student loans in bankruptcies were successful. The key is that the debtor must prove to the bankruptcy judge that retention of the loan will create an undue hardship.
There may be a growing bi-partisan appreciation in the U.S. Congress regarding the skewed system of criminal justice now existing in the country. The system works on a model that encourages mass incarcerations, teaches the imprisoned the values of hardened criminals, and then releases them into a society that refuses to give them jobs or any form of rehabilitative assistance. Meanwhile, a culture of law enforcement in Arkansas and other states still thrives on concepts like the "war on drugs," which demand arresting and imprisoning people on all forms of drug crimes.
Financial turmoil can affect anyone, regardless of his or her background, education or professional achievements. Fortunately, bankruptcy protection is available for any American consumer who is in serious financial turmoil, no matter how or why he or she became overwhelmed with debt. As the recent filing of one former Congressman demonstrates, bankruptcy protection is a tool that can provide a fresh financial start to whomever is in need in Arkansas or elsewhere.
The subject of bankruptcy conjures up several myths that are unsupported by fact but which persist both nationally and in Arkansas. These myths about bankruptcy are often created by groups that have vested interests in preventing bankruptcy debt relief. A federal reserve bank in another state has published a report that may finally stifle the false perceptions about bankruptcy relief created by some banks, creditors, credit counseling agencies and debt relief companies.