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Understanding the Purpose of Bankruptcy

Posted By Allmand Law Firm, PLLC || 7-Jun-2016

If you are considering bankruptcy as a way to get your finances under control, you are not alone. By understanding that you need to find a solution to your problems with debt, you’ve already won half the battle. Bankruptcy was intended to help those in your position, and our attorneys at Allmand law are here to help you along the path to your financial fresh start.

While every case is unique and every situation different, it’s important to understand the underlying purpose of bankruptcy and what this legal process helps people achieve. To help you understand why the U.S. bankruptcy code was created, it is helpful to consider a quote delivered by the Supreme Court in a landmark 1934 decision:

“It gives to the honest but unfortunate debtor… a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”Local Loan Co. v Hunt (1934).

The Supreme Court’s opinion explains exactly why bankruptcy exists and what it is meant to do: help people in need. Specifically, the quote focuses on two elements: financial problems and bankruptcy’s end-goal:

  • Unfortunate Troubles - The opinion specifically mentions the “honest and unfortunate debtor,” which helps highlight the fact that people can fall on tough financial times that lead to significant “pressure and discouragement.” For example, many people explore bankruptcy as a solution to their problems after experiencing financial troubles caused by job loss, injuries or illnesses, investment losses, and foreclosure. Bankruptcy can be of benefit in these situations.
  • A Brighter Future - At the end of the day, bankruptcy is all about helping people secure new opportunities in their life. The financial fresh start afforded by bankruptcy and the bankruptcy discharge can provide the “clear field” individuals and families need to gain control of their finances and find a brighter future.

At Allmand Law Firm, PLLC we speak with many clients across Dallas, Fort Worth, and Texas who experience financial troubles - and we always remind them that bankruptcy was designed to help them, not punish them. If you would like to learn more about bankruptcy, including Chapter 7 or Chapter 13 bankruptcy, your particular financial situation, and what our legal team can do to help you, give us a call for a FREE Financial Empowerment Session.

Categories: Bankruptcy
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