What is the true meaning of bankruptcy? When a debtor can't pay their debts when they are due, or even at all, then he or she has to face extremely harsh consequences. However, the debtor has numerous rights, such as the right to petition for bankruptcy relief under the federal law. Bankruptcy provides two goals for debtor. The first one is to protect a debtor by giving him/her a fresh start with erasing all creditors' claims. The second one is to ensure fair treatment to creditors who are competing for a debtor's assets. All these proceedings are held in the federal bankruptcy courts.
Ever since the new law of bankruptcy in 1994, The Bankruptcy Reform Act of 1994, the reality of personal bankruptcy in the United States changed forever. Statistics shows that during the 12 months ending June 30, 2004, a record of 1.63 million bankruptcies were filed. This is about double the number that filed a decade ago in 1993. Also, the middle value of total outstanding debt owed by households......
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