Ever wonder why do we have bankruptcy and why it’s important? Bankruptcy is important because it is one of the few tools we have to free ourselves from financial enslavement. People who cannot work freely are unproductive yet when debtors become liberated from their debts they usually once again become productive and functional to society. That’s why it’s more productive and helpful to give people in deep debt that opportunity to start over, and it is better for the economy even though there can be people who will try and take advantage of the system. Ask yourself if not bankruptcy then what? Do we try the failed mid-evil system of debtor prisons of some sort of involuntary servitude. Though bankruptcy can get a bad rap its much better than the other options that have been tried over the years.
When you have creditors calling you and you are unable to pay back your debts by yourself there may be no other way out but bankruptcy. Bankruptcy can be an important tool for you to do-over your financial troubles. Without anyway to get rid of debts, there would be no way to start over and you would work to pay off your debts in many instances for the rest of your life and still not be able to pay them all off. While we should pay back debts to the best of our abilities there are circumstances that are unexpected that may cause us to fall into debt.
I’m a proponent that bankruptcy should be a last resort, but nonetheless an important decision and a life changing thing if there are no other options. The goal of bankruptcy is to be rid of debts or in legal terms “discharged”, in other words you are no longer legally obligated to pay those debts. Is bankruptcy a flawless system – No – but it is the system we have and helps hundreds of thousands each year become productive functioning members of our economic system.