During this time of the year we join with our Jewish friends to celebrate their fall feasts. It was on Yom Kipper (The Day of Atonement) in the Jubilee Year that the trumpets blew, debts were forgiven, and slaves were set free. Our Bankruptcy laws trace back to the Biblical requirement that Hebrew lenders forgive borrowers every 7 years (See Deuteronomy 15:1-8). Since God invented bankruptcy, there is no shame in using it.
So it’s a good season to talk about bankruptcy.
1. Bankruptcy is a legal way to force Lenders to eliminate or reduce debt. Yes, you will need a Lawyer.
2. Bankruptcy comes in several flavors. There’s Chapter 11 (Reorganization) for business, Chapter 13 (3 year payout) for the middle class, and Chapter 7 (Debt Cancelation) for the very rich and very poor.
3. Bankruptcy is a black mark on your credit for 7 years. But you’ll be getting credit card offers as soon as you are out of court.
4. IRS Income taxes that are more than 3 years old can be wiped out in Bankruptcy. Other taxes will be waiting for you when you get out.
5. Student loans are not forgiven in Bankruptcy. You’ll still have to work them out in Student Loan Slavery.
6. You can prevent loss of your home in Chapter 13 by paying out the back payments over 3 years. But if you miss a payment, you’re toast.
7. In many cases a Debt Relief Plan developed using our System of Debt Relief produces a better result than a Chapter 13 Bankruptcy. Give it a try.
8. Bankruptcy is the wrong medicine for income deficiency, excess spending, or business problems. It may make your problems worse.
9. Bankruptcy makes good sense where you are harassed by lawsuits and debt collectors. It stops them cold.
10. Don’t let Lenders consume your energy and time. Bankruptcy requires less effort.
11. Your objective in Bankruptcy is to get free of debt. Don’t risk losing your financial or literal freedom by lying to keep a few possessions.
12. Bankruptcy is humbling. But humility is a good thing and can help set the foundation for the rest of your life.
13. Many successful people have overcome a past bankruptcy. In entrepreneurial circles it’s almost a rite of passage.
14. The Lord invented bankruptcy to free you from Mammon so you could serve Him:
“No servant can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and money.” Luke 16:13