Fresh Start with Bankruptcy

Fresh Start with Bankruptcy 

What is a Bankruptcy? 

My answer to the above question, is the topic I will write in detail today.  

          Bankrupt

'Bankruptcy' offers an individual or a business a chance to start 'fresh', by having the debts forgiven.  

Also, Bankruptcy offers the creditors a chance to obtain some form or portion of repayment based on what assets were available of the debtor. 

A Bankruptcy is a 'legal proceeding' involving a person or business.  I will focus on the 'person' portion of my writing today.  

          Freedom

A person in Bankruptcy is someone who is unable to repay the outstanding debts owing to all of his/her creditors.  

The bankruptcy, begins with a legal document filed by the debtors 'Bankruptcy lawyer/accountant'.  

The debtor's assets are calculated, assessed and evaluated; whereupon the assets are used to repay all or portions of the outstanding debt. 

Upon the successful completion of bankruptcy proceedings, which is approximately 14 months in length, the debtor is relieved of the debt obligations, however there are fees associated with entering this protection plan from creditors, matter of fact - big fees. 

Thank you for reading.

Ben

Interest on Loan

Interest on Loan

Previously in this blog, I wrote about how money is created, the blog is titled 'Creation of Money', please look for it.  Today, I'd like to elaborate on this topic by writing about 'interest'. 

Just a quick re-cap; in our current financial system, money is created by debt, by the banks.  The money which was created, did not exist before, every time the bank makes a loan, they create money.  

These loans must be returned/repaid to the banks, plus, the interest.

The 'interest', which is charged at the creation of money, is a problem, since money is created from 'nothing', which would mean, more money will need to be earned by the borrower, to pay the interest.  

But, a 'big' but here, mathematically it is impossible to pay the loan back, plus interest, as  there is not enough money to go around to pay the 'interest' on all the loans outstanding.  

Can you see this?

Did I explain this concept properly?

Most borrowers, can manage to pay back their loans in total; which would be the loan amount, plus the interest.  However, not all borrowers will be able to pay off the loan and interest.  

In order for most borrowers to be able to pay back the loans from the bank, some will eventually seek 'bankruptcy protection', since there is not enough money to pay for the 'interest'.  

Once 'Bankruptcy' is in the picture, the banks will get back most of all of the assets of the borrowers.   

This really is how money is created, it is loaned out to existence.   

Thank you for returning back to this blog,

Ben