Bankruptcy - Always Count Your Pennies

What is our main purpose in life? Is it to be happy or to be successful. For a lot of people, there is no difference between the two. We seem to define ourselves by what we own instead of who we are, as if success makes us better people. Some people go to such extremes to be successful, that they end up neglecting their marriage, their children and even their health. And for some people, illegal activity is worth the risk, it if brings them the success they want.

Even when people have success, it's not enough, now they need to show the world how successful they are. They do this by buying expensive homes, cars, clothes, etc. There's a lifestyle that goes with success and many of people try to project that style, even if they can't afford it. But no matter how successful people may get, they can't avoid the unexpected circumstances of life. People can get ill, have accidents or because of cut-backs, lose their jobs. Those types of situations can destroy the finances of most people. So, what are the options for when their income and unexpected circumstances will not allow them to continue to live a certain lifestyle?

Though people have a few avenues that maybe open to them, the process that many use to help fix their finances is bankruptcy. Bankruptcy is when individuals or an organization legally admits to not being able to pay their bills. Bankruptcy allows the people in debt a chance to get their bills in order, without going to the extreme of selling everything they own. During bankruptcy, some debts may no longer need to be paid; while a plan to pay other debts will be put into place.

Bankruptcy is nothing new. The first bankruptcy law was created in England in 1542. The first American bankruptcy law was passed in 1800. The American law was similar to the British law of 1705, with the exception being that there was no possibly of death, written into the American law. Congress re-worked the bankruptcy law in 1938; one of the changes that came from this was the creation of Chapter 13. Under Chapter 13, the people in debt would make regular payments to a trustee, who would in turn, pay off the people who were owed money. Chapter 13 was a big change, because in the past people would file under Chapter 7; and under Chapter 7, most people got away without having to pay-off any of their debts.

Bankruptcy can be a very important tool for people who've experienced an unexpected trauma in their life. Bankruptcy can help them get back on their feet financially. It can also help those people who chose to spend more money than they had, usually with the help of credit cards. Bankruptcy is not just for the individual. Many businesses have taken advantage of the bankruptcy law over the years. The bankruptcy law is there to help, but what individuals and businesses should consider, is trying to find a way to live their lives and run their businesses in a way to avoid bankruptcy.