Former President Thomas Jefferson, the author of the Declaration of Independence, although born into one of the wealthiest families in North America, was deeply in debt when he died. Jefferson’s trouble began when his father-in-law died, and he and his brothers-in-law quickly divided the estate before its debts were settled. It made each of them liable for the whole amount due, and that turned out to be more than they expected. Jefferson sold land before the American Revolution to pay off the debts, but by the time he received payment, the paper money was worthless amid the skyrocketing inflation of the war years. British General Cornwallis ravaged Jefferson’s plantation during the war, and British creditors resumed their collection efforts when the conflict ended. Jefferson suffered another financial setback when he cosigned notes for a relative who reneged on debts in the financial Panic of 1819. Only Jefferson’s public stature prevented creditors from seizing Monticello and selling it out from under him during his lifetime. After his death, his possessions were sold at auction. In 1831, Jefferson’s 552 acres were sold to James T. Barclay for $7,000.
Whether you live in or around Greenville, Spartanburg, or Anderson, South Carolina, whether you are rich or famous, poor or infamous, or even if you are the former President of the United States, bankruptcy can occur to anyone for a variety of reasons. It can happen to you.
Bankruptcy is defined as a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Any event like a loss of job, illness, or divorce can cause you to face a bankruptcy. The fault can lie with a partner or an outside source, but if you do not have the income to pay your living expenses and all your creditors within a five year period, more than likely you are bankrupt.
The Associated Press claims that bankruptcies filed in the US in 2009 totaled 1.4 million, which includes both businesses and individuals. That would be a 300% increase since 2006. In South Carolina, there were 9,750 cumulative filings, up 15% from 2008. The trend knows no state boundary.
There are two types of bankruptcies- voluntary and involuntary. An involuntary bankruptcy occurs when a creditor forces you into bankruptcy by filing for legal proceedings, but the most common bankruptcy is the voluntary type where a business or an individual realizes their predicament and files for proceedings.
An individual can file either a chapter 7 or a chapter 13 bankruptcy. A chapter 7, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A chapter 13, commonly called a wage earners plan is available to individuals, and it enables those with regular income to develop a plan to repay all or part of their debts.
If you have an income and qualify for a chapter 13, there are certain advantages for filing one. These advantages are: to save your home from foreclosure; to reschedule secured debts; to provide protection for co-debtors; to consolidate your loans under one plan; to keep non-exempt property; to extend certain tax obligations, student loans, or other such qualifying debts; and to qualify for bankruptcy relief. Filing a chapter 7 will not afford you these various opportunities listed. So, if you have assets you want to keep, you currently have an income, and you want to try to pay your creditors as much as what is reasonable, you may want to consider filing a chapter 13 bankruptcy. But, if you do not have many assets, you do not have a mortgage, you just want to get out from under the burden of your debts, and you qualify, you may want to consider filing a chapter 7 bankruptcy.
If you have found yourself facing the fact your income will not support your living expenses and current bills, you may have to consider filing for bankruptcy. After all, it can happen to you. If this is the case, please consider allowing a bankruptcy lawyer to properly help you understand how these complex laws may apply in your situation. If you have determined that bankruptcy can and has happened to you, and you live in or around Greenville, Spartanburg, or Anderson, South Carolina, contact us today and we will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.
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