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Bankruptcy and debt payment

The consumer credit society has been liberalized for any person who is unable to meet his debts payments and wants to solve them through bankruptcy process. This has been done through expanding and modernizing laws regarding bankruptcy which gives chances to debtors to have a fresh starting in financial matters and creditors being given about 50-60 per cent for amount owed depending on the bankruptcy case. The laws contain two chapters that have two options for discharging a debt. Straight bankruptcy allows debtors to give most of their properties for liquidation in court to discharge most of the outstanding debts

(http://ezinearticles.com/?Bankruptcy-Relief-Can-Solve-Debt-Problems&id=895624).

Wage earners plan is a mode of bankruptcy in which a person can retain his or her property and pay off their debts over a given duration. This allows people who can not pay their debts in time to create a plan to pay in partially or full. Initially, it was only available to persons who got regular wages, but some alterations in the statutes currently allows unincorporated small business entrepreneurs to take part in the process currently know as the chapter Thirteen proceeding a rehabilitation which gives chance to the owner to regain good credit and better financial standing.

To qualify

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for this scheme, one must be possessing unsecured debts of not more than $ 100,000 and must file a petition of Chapter thirteen giving all debts and proposes a plan for repayment to the court of bankruptcy. His creditors suspend their plan to collect their claims pending the results of the proceeding. Wage earner plan there fore happens to be the most favorable scheme for such a person who wishes to solve the financial debts through bankruptcy.

 References

Selvon Mike (2008). Bankruptcy Relief Can Solve Debt Problems. Retrieved on 17th February 2009 from, http://ezinearticles.com/?Bankruptcy-Relief-Can-Solve-Debt-Problems&id=895624

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