Bankruptcy: Frightening Reality Essay

There is a widespread concern about rising levels of debt. Debt can become disastrous for those who live alone or those families who are already having problems with supporting their family. The people who might be struck by debt, they might have trouble recovering. Debt can cause Americans to lose their homes and stability they need to feed, and shelter their families. Although debt comes upon us Americans quickly, people can see debt as terrible thing to be stuck with. It has many disadvantages that can devastate to people.

Many companies in the United States are struggling to survive. These companies are experiencing significant decreases in revenue, reduced assets, and increases in liabilities. Companies that already filed, or are at-risk for filing bankruptcy are struggling with keeping up with their competitors, causing the companies to lose their value. When a company files for bankruptcy, the company no longer gets to make the business decisions. The bankruptcy courts begin to make the decisions for the companies in efforts to restore the businesses. If the company is unable to revive itself from bankruptcy status, the company goes out of business. If this occurs, the company must sell everything it owns in order to compensate its shareholders and repay

bankruptcy because bills and health care bills are piling up so high that they are unable to afford it. This all trickles down and effects everyone in different ways.

Problems in the student loan market are not just harming students but are also exacerbating problems with the United States’ recovery from the Great Recession. New York Federal Reserve Bank data has found that outstanding student debt topped $1 trillion in the third quarter of 2013, and the share of loans delinquent 90 days or more rose to 11.8 percent. Furthermore, the share of 25-year-old Americans with student debt increased to 43 percent in 2012 from 25 percent in 2003, while the average loan balance rose 91 percent, to $20,326 from $10,649 (Gage and Lorin). More than 40 million Americans are in student loan debt and because of this, more than 40 million Americans are not able to stimulate the economy as they are not able to buy houses or cars, or start businesses or families (Applebaum). In Wisconsin alone, student loan debt has resulted in a loss of over $200 million annually from new car purchases, while also resulting in middle class households with student loan debt overwhelmingly renting homes instead of owning them (Vanegeren).

Chapter 7 bankruptcy is often referred to as the liquidation bankruptcy because your non-exempt assets are sold (liquidated) by a bankruptcy trustee, with the proceeds (money) being distributed among creditors in order of highest priority to lowest.

As of 2016, the average college graduate owes thirty-seven thousand dollars in loans (Glum). As a whole, Americans owe a grand total of 1.3 trillion dollars. These are figures that grow every year, and worse, the number of people who are defaulting on their payments grows as well. The issue of the student loan crisis is serious, which is why potential solutions are now being discussed. Presidential candidates for the election of 2016 have discussed solutions that range from Hillary Clinton’s debt-free college plan to Bernie Sanders’ free tuition plan funded by taxing Wall Street, while numerous scholars and business intellectuals have suggested amending the bankruptcy code to allow for discharging student loans as a solution to the crisis (Josuweit). In this essay, I will primarily discuss the numerous but limited ways amending the bankruptcy code can alleviate the crisis, and then I will offer alternate solutions to supplement the aforementioned solution.

Stern and Larry B. Feinstein that “unless the debtor is living in a cardboard box under the freeway. . .student loans must be repaid.” Students do not have the ability to liquidate their assets and get a fresh start with the absence of student loan debt. The tedious chore of chipping away at the profusion of student loan debt leads to a garnishment of wages, and the debt will continue to accumulate eventually damaging the student’s credit rating. A damaged credit rating will label the student as a “high risk borrower” making it more difficult to receive future loans on a house or car. With 40 million Americans suffering from student loan debt, the economy submits to a tight lending environment and less money in circulation sunsequently decreasing America’s Real

This paper is about how did “Shadow Banking” precipitate the financial Crises. Then discusses the impacts of the crisis on the major financial institutions.

“Bankruptcy doesn’t discriminate: in 2001, almost one in five Americans from ages 18 to 24 declared bankruptcy…”(Walsh).

Whilst a critical part of consumer spending, credit card companies are constantly accused of malicious legal contracts and schemes to increase profits. Without heavy regulation, these companies have the power to bankrupt millions of Americans that rely on credit cards in their daily lives. However, after the introduction of The Credit Card Act of 2009, these accusations represent an inability to accept responsibility for financial blunders on the consumer’s behalf. Due largely in part to the government’s strict regulations, credit card companies should not be at fault for the student credit card debt crisis. Credit card companies remain blameless for student credit card debt as a result of

“The average American owns 3.5 credit cards and $15,799 in credit card debt… totaling consumer debt of $2.43 trillion in the USA alone.” (Beckner). Debt forces many people into depression and worrying lives. People struggle to discover happiness through financing goods, but struggle even more to find a way out of debt. Through consumerism, people lose their finances in department stores, car dealerships, and much more. Most of the possessions people buy with credit cards become impractical within a few months. The void they search for is never really filled. Consumerism is just a way to get the economy going, without thinking of a person’s individual finance

On September 15, 2008, Lehman Brothers filed for bankruptcy. With $639 billion in assets and $619 billion in debt, Lehman 's bankruptcy filing was the largest in history, as its assets far surpassed those of previous bankrupt giants such as WorldCom and Enron. Lehman was the fourth-largest U.S. investment bank at the time of its collapse, with 25,000 employees worldwide. The consequences for the world economy were extreme. Lehman’s ' fall contributed to a loss of confidence in other banks, a worldwide financial crisis and a deep recession in many countries. Lehman 's collapse roiled global financial markets for weeks, given the size of the company and its status as a major player in the U.S. and internationally. Many questioned the U.S. government 's decision to let Lehman fail, as compared to its tacit support for Bear Stearns, which was acquired by JPMorgan Chase & Co. (JPM) in March 2008. Lehman 's bankruptcy led to more than $46 billion of its market value being wiped out. Its collapse also served as the catalyst for the purchase of Merrill Lynch by Bank of America in an emergency deal that was also announced on September 15.

Jamaica is not just white sand beaches and mimosas. Behind the thin veil of paradise lurk corruption, violence, and inequalities. Life & Debt illustrates the daily realties of Jamaica following IMF structural adjustment programs. IMF reforms have perpetuated a cycle of debt that Jamaicans have little hope to escape. Although IMF conditionality claims to develop nations so that they can grow and re-pay their lenders, Jamaica is still indebted $4.5 billion dollars and has little development to show for it. Measures of austerity coupled with devaluation, high interest rates, and drops in local wages results in greater unemployment, increased violence, and widening inequality. The bulk of the film focuses on how global integration has undercut

Credit card companies prey on naïve students to maximize their own profit. According to the documentary Maxed Out (2006), credit card companies prey on uneducated adults who more than likely not pay their bill on time. This guarantees them max profit whether it is paid by consumer or companies that buy debt.

Over the years, the process of declaring bankruptcy has become incredibly simple. Because of this change, the number of people declaring bankruptcy is at an all time high. Today, bankruptcy is a common thing among companies and individuals alike. The American bankruptcy law allows people to avoid paying their debts by offering the debtors a discharge without a harsh consequence. By not having repercussions for their actions, bankruptcy filers often plan future bankruptcies, allowing them to steal even more money from creditors with no punishment. There are 13 different chapters in the bankruptcy system with the principal chapters being 7,11, and 13. You can only file for bankruptcy under these three chapters, the others are there to