¶ … gathered an understanding of some aspects of finance and am writing this paper on the topic of finance and bankruptcy. I have worked in the field of retail and enjoyed the training for assistant manager that was received. I also have taken several finance classes in college as well as an advanced finance class at the high school level, which helped prepare me for this learning experience regarding the topic of bankruptcy. I am young enough to understand and participate in today's economic climate while being old enough to understand the ebbs and tides that are a historical fact of the economy. I have a desire to learn as many possible aspects and facts as possible about the topic of bankruptcy so that the I will be better equipped for the more advanced university level finance courses that may be required before graduation.
I will draw on several factors that I am already prepared to undertake. I will use books and articles to discover many facts about bankruptcy that I do not know. It will allow me to apply the knowledge already gained about finance to the topic of bankruptcy. I am prepared through the use of several previous classes to understand and learn new concepts that include the laws of bankruptcy, the reasons for it and the alternatives to it. I am a student who has already demonstrated ability to self-teach and self-learn through other classes. I am qualified to write this paper because of past life experience, the eagerness to learn, the ability to research and the desire to experience the topic as thoroughly as possible.
This paper is going to fully explore the topic of finance when it comes to bankruptcy. The paper will discover through research the laws that govern bankruptcy, the reasons that it is used, and the alternatives to its use. The paper will explore not only the facts and figures regarding bankruptcy and its history, but also the feelings the educational journey promoted in me. I will discover and discuss through the process of learning how the topic was different than the evaluator thought it was going to be. The pre-conceived notions will be handled as well as the newfound facts regarding bankruptcy. I am going to take the reader on the act of learning as I begin an immersion process that will lead to knowledge.
WHY DO PEOPLE FILE?
When I first decided to approach the topic of bankruptcy I did so because of the Enron downfall. I realized that the people being publicized had dealt with millions of dollars. I began to wonder what happens to those who are simply individuals and having a hard time surviving. Could they file bankruptcy and walk away? I knew there was such a thing as a personal bankruptcy but because the media always covers the huge corporate bankruptcies and those rules are different. My decision to study personal bankruptcy was also colored by the growing personal knowledge that the economy in this nation has been stagnate for several years and the experts are not predicting any change in the immediate future. This brought me to the conclusion that there may be more people declaring personal bankruptcy than in recent years. In addition as the large companies continue to tumble there is bound to be a trickle down effect that will cause personal bankruptcies to increase. I modeled this learning experience from the perspective of the personal bankruptcy participants and what it means for them though I will also explore what this means to the nation as a unit.
PRE-CONCIEVED NOTIONS
Before I started this learning experience I wanted to note any preconceived notions that I had before studying the topic. We are all programmed to draw conclusions about topics based on the information that we have gathered through our life experiences. I found that I was no different. I knew very little about personal bankruptcy and had some preconceived notions that panned out to be untrue. One of the most important preconceived notions that I held when it came to personal bankruptcy was that only people who were less than reliable filed. I didn't think it was something that "normal" or "responsible" people did. I had this visual in my mind about the "type" of person that filed personal bankruptcy that was not very flattering. As I began my studies and learning experience I realized that my preconceived notions had been wrong.
WHAT IS BANKRUPTCY
Before I could begin...
I turned to several publications as well as a few online sources and discovered that bankruptcy is not only an American issue. There are bankruptcies being filed worldwide and each nation has its own laws, by-laws and rules for the way it has to be handled and the way it has to be completed. I was able to narrow my focus on the United States bankruptcy rules and laws and through my search discovered many interesting facts. The bankruptcy law of the United States allows and provides for the a plan to be developed that will allow a debtor who is unable to pay his creditors, to resolve his debts. This done through a complicated yet simple process called bankruptcy. The plan causes a division of assets among the creditors (bankruptcy: an overview (http://www.law.cornell.edu/topics/bankruptcy.html).
A learned something even this early in the process. For many years when I thought about personal bankruptcy I thought all of the protection was afforded to the consumer who was filing the action (bankruptcy: an overview (http://www.law.cornell.edu/topics/bankruptcy.html).I believed that it provided them with a way to walk away form their debts and start over regardless of what it may do to those that they owe. As I began my voyage into the learning process regarding bankruptcy I realized that the laws not only provide and protect the consumer with avenues of relief, but they also provide the debtors with a way to be treated equally. It takes the ability away from the consumer to pick and choose who will be paid and who will not and it places it with the courts who treats all of the creditors equally from an unbiased and fair standpoint. It gave me the understanding that the bankruptcy laws are designed to help and protect both sides of the issue. There are several different measures that are allowed in bankruptcy that will afford the debtor the ability to at least partially pay what he or she owes. From the standpoint of the creditors it provides them some ability to recoup from those they believe really can afford to repay them and are filing because of other debts that may be impossible (bankruptcy: an overview (http://www.law.cornell.edu/topics/bankruptcy.html).
The bankruptcy laws are currently designed to provide relief in carrying degrees. There are several chapters that can be declared but for the purposes of this paper there are two. Chapter seven allows the debtor, the person who owes the money to walk away without repaying any of the debt that he or she owes. This is called a full discharge and it prevents the creditor from trying to collect in any way at all. When chapter seven is filed the creditor is not allowed to contact the debtor in anyway. Not by mail, not by phone, not by email and not in person. It provides a complete and total block of contact from the creditor to the debtor in the effort to protect the debtor from harassment. While this sounds harsh there are measures and rules in place to protect the creditor from having bankruptcies filed that should not have been and those will be discussed later in the paper.
A chapter 13 allows the debtor to pay off a percentage of their debts while discharging the balance. The payment is based on a percentage of the debtor's income and has to be paid out equally to all creditors regardless of any interest or percentage rates that may have applied to the original debt.
My reaction to this learning was one of surprise and one of approval. I had thought in the past that a personal bankruptcy absolved the debtor of any responsibility for the debts that he or she owed. I didn't and still don't if the person truly needs this type of relief but it was a pleasant thing to discover that there is an alternative allowing some repayment to occur. I learned that there are degrees of bankruptcy that can be dependant on the assets and abilities of the individual doing the filing. I observed through the reading of the laws that the bankruptcy court is set up to supervise the division and distribution of the assets belonging to the debtor. It is a process by which rules are adhered to and the same rules apply uniformly across the board. This observation also strengthened my growing comfortableness with the process of bankruptcy on a…
