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Why Pay Some Creditors Back After Filing Bankruptcy?

Why Pay Some Creditors Back After Filing Bankruptcy?
"Since the 2008 economic collapse, an increasing number of individuals have filed for bankruptcy. In the past, many individuals avoided declaring bankruptcy and now only do so as a last resort because they feel they must repay their debts. There are many circumstances in which it would be advantageous for the insolvent to repay a portion of their creditors after the bankruptcy discharge, despite the fact that this is a luxury not enjoyed by the majority of individuals in the modern era.

The majority of average citizens are unaware of their rights and limitations following a bankruptcy filing. Many believe that it is unlawful to repay someone after their discharge. Then there are the few who are threatened by a previously discharged creditor and feel compelled to continue making payments. In reality, after a bankruptcy discharge, the debtor is no longer liable for any of the debt. A bankruptcy discharge is a permanent statutory injunction that prohibits creditors, including lawsuits, from pursuing collection of a debt discharged in a bankruptcy filing. For violation of the injunction, the bankruptcy court may sanction the creditor with a fine for civil contempt.

As in the case of a debt from a friend, family member, or employer that was discharged in bankruptcy, where a person really needs to conduct some soul-searching. After filing for bankruptcy, they are not required to repay the debt, but if they wish to maintain a relationship with a family member or close acquaintance, they should work something out.

It would also likely be a good idea in the case of a debt discharged in bankruptcy that was owed to an employer. The bankruptcy law prohibits discrimination against debtors by both private employers and government agencies. A private employer or agency cannot discriminate against a debtor who has filed for bankruptcy because the debtor's bankruptcy discharged the employer's debt. These bankruptcy discrimination laws prohibit terminating an employee, any form of hiring or promotion discrimination, suspending an employee, and denying a debtor the ability to renew a license, franchise, or similar privilege. These strong words safeguard the debtor who has filed for bankruptcy by stating that the employer may not discriminate against the employee solely on the basis of the bankruptcy filing. Even though the bankruptcy laws are very explicit about discrimination, it would be prudent to continue making payments to the employer. They could be as simple as the employer needing to lay off three employees, but the debtor would likely be the first to go if he or she is more experienced. It would be very difficult to demonstrate that this was a case of discrimination as opposed to economic decline.

It would be in the debtor's best interest to maintain relationships with family and friends, despite the fact that they will not be required to repay their debts, if they file for bankruptcy. The debtor should consult with their bankruptcy attorney for feedback on the matter. Put yourself in the position of the creditor and ask yourself, ""How would you feel if your friend didn't pay you back?"" This is the best course of action.

" - https://www.affordablecebu.com/
 

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"Why Pay Some Creditors Back After Filing Bankruptcy?" was written by Mary under the Finance / Wealth category. It has been read 143 times and generated 0 comments. The article was created on and updated on 01 June 2023.
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