How Can the Benefits of Bankruptcy Have a Positive Affect on the Community?
Benefits of Bankruptcy for the Community
The benefits of bankruptcy extend beyond just the individual—they positively affect the community as well. Surprising? Many associate bankruptcy with dishonesty or irresponsibility, assuming it causes widespread harm. While there are occasional bad actors on both the debtor and creditor sides, this is not generally the case. When the overall economy declines, people start losing jobs. This leads to an increase in home foreclosures and car repossessions, which can worsen an already difficult situation.
Bankruptcy is often the result of a complex set of challenges, not simply poor decisions. It is typically a last resort, and for good reason—it should not be taken lightly. Most who file for bankruptcy face a combination of hardships that overwhelm their finances. The math is simple: more money is going out than is coming in. While bankruptcy is no golden goose, it can effectively stabilize an individual, family, or business by providing essential relief, which then has a positive ripple effect on the larger community.
Maintaining Stability
Bankruptcy helps individuals reorganize and prioritize their debts, which supports family and economic stability. Securing assets like homes or cars ensures people remain active participants in the local economy. For example, a car enables someone to commute to work, contributing to economic activity. On the other hand, when large numbers of homes are foreclosed, families leave, and the community suffers—sometimes turning into a ghost town. Instead of dominoes falling, bankruptcy can restart the building blocks for renewal and stability.
Support for Essential Services
Bankruptcy law for both Chapter 7 and Chapter 13 prioritizes taxes and child support, both of which directly impact the community. Paying taxes helps fund essential services like emergency response, education, and government operations. In the case of child support, bankruptcy law ensures that the most vulnerable are protected. Child support must be current before an individual can receive a discharge of other debts, ensuring families receive the support they need.
Fairness to Unsecured Creditors
After paying various expenses, unsecured creditors are paid pro-rate based on what remains in the individual’s budget. Payment amounts are determined by the debtor’s ability to pay and assets. Bankruptcy law is a balancing act attempting to treat debtors, creditors, and the broader society equitably.
Strengthening the Community
Debt is rarely the only issue facing someone who files for bankruptcy. When the community supports individuals in financial distress, it strengthens both the individual and the community as a whole. The relationship between the two is often symbiotic.
Do you desire to take back control of your debt and start the building blocks to stability? At Sasser Law Firm, our attorneys will assess your situation and discuss your options. Call Sasser Law Firm (919-319-7400) to schedule your free consultation. Perhaps we can help.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.
