Michigan Bankruptcy Lawyer

MarketWatch reported earlier this month that access to personal bankruptcy is good for America. This may seem counter-intuitive at first, but here are four reasons why bankruptcy is actually good for our economy.

1.) It encourages positive spending.

When you are surrounded by debt, almost all of your money is going towards alleviating that debt. However, paying off debts doesn’t necessarily bring that money into circulation within our economy. In fact, if you’re paying 20% interest or more on a credit card debt, the creditor has typically already been paid back the initial balance as well as a healthy profit.

If you apply for bankruptcy and those debts are wiped out, you’ll obviously still be spending money. However, this money will be going towards food, clothing, services, and other outlets that help to boost our economy by helping businesses and therefore bringing our country back towards prosperity.

2.) It gives you a second chance on your mortgage.

Many people currently facing bankruptcy or foreclosure bought a large house back when interest rates were low and could afford it. However, no one could have anticipated the market would turn out like it did and those people are now stuck with mortgage payments that they can’t afford on property worth much less than their initial mortgage value.

However, bankruptcy can take that mortgage off your back and help you to start saving up money for a down payment on a more affordable house. “People coming out of bankruptcy are usually more cautious and conservative about buying their next home post-bankruptcy”.

3.) It gives you a better hold on whatever debt is left.

Filing for a Chapter 13 bankruptcy can allow you to keep your home and secure a more manageable grip on your payments. If you file for a Chapter 7 though, you will be free of all your debts, but most likely won’t be able to keep your home. This is not always a bad thing though!

Simply being able to cut off the vast majority of your debt allows you to more easily manage the debt that may remain and help you work your way towards rebuilding your credit much easier.

4.) It encourages full employment.

When you are drowning in debt, it’s very hard to see that light at the end of the tunnel. Opting for bankruptcy and bringing your debt down to a manageable level not only let’s you see the end of your debt, but also brings into view your debt-free future. This typically motivates people to work harder and find jobs.