Bankruptcy filings are down but they will rise after October 2013 when people realize that they can file again

bankruptcy 5Bankruptcy filings are down significantly across America.  I wrote about this in a previous blog.  Some areas have seen a drop-off of as much as 50% in the numbers of filings.  There Courthouse 2are many reasons for this.  One reason is that most homes that were in foreclosure after the recession began have now been dealt with one way or another.  Household debt is also down and household debt has always been an indicator of how many bankruptcies will be filed.

Some economists believe that there will be another wave of foreclosures that the banks have been holding off foreclosing until there are signs of an economic recovery.  But there is another factor out there that will hit this October.  In October 2005 millions of Americans filed for bankruptcy in order to get their filing done prior to the 2005 bankruptcy law change.

Bankruptcy underwent a major change in 2005 designed to make it harder for debtors to file a chapter 7.  As it turned out most people could still file even with the new “means test” that was added in the new law.  But the 2005 bankruptcy law change scared people into thinking that bankruptcy was not going to be an option so they had better file now.

So millions did and many of them probably should not have.  But after 2005 the country went through a major recession.  Jobs were lost, foreclosures were up, and debts could not be paid.  But one aspect of the new law was to increase the time between bankruptcy filings from seven years to eight years.

We are now about to reach the eight year mark in October 2013.  This means that if you filed bankruptcy before the law change in 2005 (and maybe didn’t need to) you can file again in October of this year (2013).  It is now okay for you to file again so if you need to contact an attorney about filing a second time.  Don’t worry about having to do it it’s okay.  No one could foresee the terrible recession of 2008 and it probably has left you will a lot of debt that you have not been able to pay.  Bankruptcy will again take care of this debt once and for all giving you a fresh start.

I am a San Diego bankruptcy attorney.  For further questions please visit my website at www.farquharlaw.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

Bankruptcy photo courtesy of Stockmonkeys.com.  Courthouse photo courtesy of Robert Linder.

Bankruptcy and the Bible. Yes, debt forgiveness is in there!

bible 3You may have heard it quoted.  It is written in the bible in the Old Testament.  I quote it here:  Deuteronomy 15:1-2, “At the end ofDeuteronomy 3 every seven years you shall grant a release.  And this is the manner of the release:  Every creditor shall release what he has lent to his neighbor.  He shall not exact it of his neighbor, his brother, because the Lord’s release has been proclaimed”.  Yes it is in the bible.  A “release” from your debts shall be granted every seven years by your creditors.

This verse therefore commands creditors to release people from the debts owed by debtors every seven years.  You could argue that the bankruptcy just enforces this biblical passage through the use of law.  You could easily argue that bankruptcy is indeed the very debt forgiveness talked about in this biblical passage.  (And I doubt the creditors will follow this biblical principle without bankruptcy law but you can try).

You could ask why is debt forgiveness in the bible.  Most of us in the debt relief business believe that it is in the bible because people knew in ancient times what we should all know now.  Debt is damaging to people, damaging, to society and damaging to the future of mankind.  It can’t be carried by people forever and it can’t be allowed to follow them and put them in debtor’s prison forever.

Debt slavery is extremely undesirable and indeed intolerable.  Debt must be released and people must be freed from it.  Ancient peoples knew that then and most of us who have lived with debt know that now.  And some would say that God commanded a seven-year debt forgiveness through this verse in case people forgot.  But it is clear that the bible sanctions debt release/forgiveness and it appears that it must be done on a regular seven-year basis.  It is hard to argue that this verse could mean anything else but that.

I believe that it is true that this forgiveness is necessary because people who are burdened with debt can’t spend, save, invest in homes or retirement and therefore can’t truly be productive members of society.  Sadly many of them check out and some even commit suicide because of debt.  Many of my clients have told me that they have considered suicide with all their debt prior to their consideration of bankruptcy.  Debt burdens are potentially the ruin of individuals and nations.  (see here for my article on my website on why you should file bankruptcy)

Bankruptcy is not the bad thing that many people believe it to be.  Many believe that it is irresponsible, somehow sleazy, underhanded, and in effect cheating.  Many believe that they must pay back their debts no matter how large they are and no matter how long it takes.

But then what is the purpose of your life?  To be a slave to your debt?  To spend you entire days on earth paying something to someone else that enriches them and impoverishes you?  With interest?  They knew better thousands of years ago.  I often believe that in modern times we make silly mistakes and have ridiculous beliefs that our ancestors would laugh at.

Bankruptcy is a liberator of people.  It frees them from debt and gives them a fresh start.

For all of our modern science and technology we still sometimes forget lessons they learned long ago,  One of them is that debt is bad.  It must have a limit in years.  It must be forgiven periodically.  This is good for everyone so let’s get on with it.

The next time someone disparages your thoughts of bankruptcy mention to them that it has been recommended for a very long time by some very trusted sources.  Enjoy your freedom and God bless!  Check out my blog about bankruptcy and Christianity here.

I am bankruptcy attorney in San Diego.  Please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com for more info. about any of these topics.  Or call my office for a free consultation at (619) 702-5015.  Call now for free credit report and analysis!  For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.

Holy bible photo courtesy of Jemimus.  Deuteronomy photo courtesy of Billy Alexander.