Viewing Bankruptcy As White Collar Crime.
Household debt and bankruptcy are at record levels and appear to be on the rise. In calendar year 1999, approximately 1.3 million individuals sought the relief from debts and claims of creditors by filing for bankruptcy, down slightly from the 1.4 million in calendar 1998. So what is bankruptcy all about? And can bankruptcy be considered as white-collar crime?.
For most, bankruptcy is nothing more than a fresh financial start. It is designed to help those who are in debt beyond a reasonable means to repay. The law states that a person is entitled to start over financially so long as they have not been dishonest in getting into debt. Bankruptcy will wipe out all of your unsecured debts and let you keep most, if not all, of your property. Bankruptcy is written right into the Constitution (Article I, Section 8, Paragraph 4) and therefore, United States Bankruptcy Law has been around for more that 200+ years. Virtually every industrialized country in the world has the option of filing bankruptcy as a method of relief. Bankruptcy is the necessary safety valve in the free market system. Without bankruptcy, people that are over their heads financially would give up or become part of the underground. While it is not easy to make the decision to file bankruptcy, over one million Americans survive it every year. .
There are four main types of bankruptcy: Chapter 7, 11, 12 and 13. Chapter 7, which is also called Liquidation, is the most common of the four. It is designed for debtors in financial difficulty that do not have the ability to pay their existing debts. Under Chapter 7, you may claim certain property exempt and a trustee may take .
possession of the remaining assets in order to liquidate them and pay your creditors according to priorities set for therein the Bankruptcy Code. As mentioned above, Chapter 7 of the bankruptcy code defines a type of bankruptcy filing called liquidation.