Sometimes pride can be a great detriment to one's right to financial peace of mind. Pride can prevent a retired person from filing bankruptcy when the need arises. There are many reasons why a retired person residing in Arkansas or another state will have a legitimate need to file for federal debt relief. When that need occurs, the failure to file bankruptcy can sometimes mean the failure to protect one's retirement assets from creditors.
The trouble with much of the conventional wisdom about debt overload is that it often asks for virtually superhuman financial sacrifice by, in one way or another, paying off essentially all of the debt that is owed. Programs such as consolidation plans, paying one debt at a time, or even negotiated "reduced" settlements with each creditor are all treacherous and exhausting pathways that often fail or provide no long-term benefit to the debtor. When one does the math and makes relevant comparisons, no remedy works better in Arkansas or nationwide than a Chapter 7 bankruptcy.
Federal litigation against major banks may give a victory to consumers nationwide, including in Arkansas. Many persons who received a discharge in bankruptcy found in recent years that the banks were continuing to report bills, such as credit card balances, as still due and owing. Federal law requires banks to erase, without negative comment, accounts discharged in bankruptcy from the debtor's credit bureau records.
In recent years, news articles abound regarding the filing of personal bankruptcy by public officials. These incidents are sometimes harmful to the individual's political career but not always. Where the debts comprising the bankruptcy are typical consumer bills, the public in Arkansas and elsewhere is more inclined to have an understanding perspective toward the person's need for help.
Sometimes a personal bankruptcy is precipitated by a lawsuit for back rent and/or an eviction proceeding. A bankruptcy may also be needed if an ejectment action is brought against a debtor after a foreclosure and sale has been consummated. In Arkansas, the manager of World Gym has filed a personal bankruptcy that appears to have been precipitated by a suit against him for $475,000 in late rent.
Bankruptcy has been used by many well-known entrepreneurs and celebrities over the years, including some from Arkansas. The fact is that even the rich and famous may be vulnerable to falling into bad economic times or making hugely unwise business decisions or investments. Bankruptcy law is flexible enough to accommodate a wide variety of personal and business financial crises.
Some observers believe that medical debt is the biggest cause of bankruptcy filing in the country and in Arkansas. According to one national agency, there are some 43 million persons with unpaid medical debt on their credit reports. The probable reason that many with burdensome medical debt file bankruptcy is that it is fairly easy to discharge unsecured debt in a liquidation proceeding under Chapter 7.
There is continuing national crisis regarding the direction and handling of medical bill debt, according to an extensive expose in USA Today. With more than half of the insured people in Arkansas and in the rest of the country being covered by insurance plans through their employers, many workers are coming more and more to experience the ravages of underinsured coverage. Instead of finding ways to buy plans with lower deductibles, employers have almost exclusively chosen group plans that emphasize higher and higher deductibles, which makes the premiums more palatable to employers.
There are several reasons why consumers in Arkansas may find it necessary to choose bankruptcy to get out from under a crippling debt load. Reasons commonly cited for bankruptcy filings include credit card spending, unexpected medical expenses, losing a job and disability. Consumers who choose to get major debt relief by filing for bankruptcy are often industrious, hard-working individuals and married couples.
Arkansas and other states are seeing that some persons who lost their homes and filed bankruptcies for debt relief during the recession are now back and applying for new mortgages. In fact, although a Chapter 7 bankruptcy can be reported for up to 10 years, a mortgage for a home purchase can be obtained sooner than that. It depends largely on how well the consumer has done in repairing his credit score.