Originally Posted by DanaT
Do you believe that people, for example if they lose their job, should be able to file bankruptcy?
Bankruptcy is an area where you have some misunderstanding. This has come up in other threads, and I'm looking at US bankruptcy law only. (BK=bankruptcy -- legal shorthand.)
BK isn't always a "get out of jail free card". You can't just say "I don't want to pay what I owe", and walk away. Yes, there is abuse, but this isn't always the case. You have to say "I can't pay what I owe" and then let the process look at your situation to see if that is accurate.
It a moral problem. Sure, it is hard to justify letting someone walk away from irresponsible behavior. But someone who has had a catastrophic illness that exceeded the medical insurance limit has a more justifiable reason. BK protects both the irresponsible and the unlucky.
If you have the ability to pay all or a portion of your debts with income or assets, you are likely going to lose some of those assets and/or have to make payments for a few years.
If you have personal property over a certain amount, and real property over a certain amount, the portion over the limit is subject to being taken in the BK case. Note that just as debts like student loans are generally not dischargeable, some assets are exempt from being taken; an auto mechanic's tools are an example.
Every case is different, but if you are single, have $20,000 in credit card debt, make $35,000/yr and own a boat and motorcycle worth a combined total of $5,000, you will probably lose those toys, and you may have to pay some of the debt.
If you owe $30,000 have nothing but an old car, make $22,000 and you live with a friend, you will probably walk with a total discharge.
Owe $50,000, make $150,000, have a coin collection worth $35,000? Expect to have your BK petition denied.
It also matters how you incurred the debt. If you owe $30,000 in cc debt, run up another $5,000 for a cruise then file a month after the cruise, expect to be denied. Running up the $5,000 after you fall and have some front teeth broken would be a different story.
You have to report all debts, expenses, any income, and any assets. If you don't report all
income and assets, you may have your petition denied, and your debts will remain.
Small oversights, are not a big deal, but if you deliberately conceal any incomes or assets, and you get caught, count on your BK being denied, and pray you aren't prosecuted.
This isn't the academic view of BK, this is roughly what happens in reality. It may not match your experience with your debtors, but consider that you may see a particular segment of all debtors. I guess in statistical terms, you may have a biased sample.
It's like this:
Some cases are
Some of them are
Sorry to talk your ear off, and if you already know any of what I wrote, please don't take it as an insult to your intelligence....