Never before in history has there been so many different things to buy, or so many places to buy them from. We are constantly bombarded everywhere with messages telling us that we need to have the latest products being touted. All around us are constant opportunities to purchase every kind of bauble, gadget, or toy. In spite of a slumping economy, American people are still shopping with a fervent passion. In recent times, chronic overspending has become a major problem in our society. The growth of capitalism has created a huge demand for goods and services. It is estimated that about ten percent of the American population has compulsive buying habits. A lot of people are finding themselves without any kind of a savings, or worse, in debt over their head. Not only does this impact our individual lives, but it affects our businesses as well. Many businesses go under because of a lack of precaution and poor money management. Overspending can lead to personal bankruptcy and business bankruptcy.
Bankruptcy is a last resort financial maneuver activated by those individuals or businesses that face insurmountable debts as a result of overspending or faulty business ventures. Bankruptcy is a federal program, which offers an individual or business entity alleviation from all debts obtained, both secured and unsecured. A bankruptcy filing offers relief to those in debt, through either liquidation or restructuring. Liquidation refers to the selling of the underlying debtor’s assets. When these assets are sold the proceeds are used to fulfill their debt obligations. The laws and regulations which govern bankruptcy are distributed and overheard at the federal level. A bankruptcy filing enables those struggling with debts to reorganize their debt structure by supplying incremental payments to their creditors. There are many different forms of bankruptcy filings, the most common of which being a chapter 7 filing, a Chapter 11 filing, and a Chapter 13 filing. The bankruptcy statistics in America are alarming. The past few decades have seen a dramatic rise in the number of people who are unable to pay off their debts, and Congress has recently addressed the issue with legislation that makes it harder to qualify for this status. Bankruptcy is a major part of business law, as many companies and individuals consider filing at some point in their lives. Over-consumption, overspending and households that simply live beyond their means are the primary factors that wreck finances and lead to bankruptcy. When household budgets are stretched to the limits and beyond, a single adverse event such as an illness or layoff can immediately lead to bankruptcy. While many bankruptcies may be triggered by these adverse events, the true cause of the bankruptcies is overspending. In recent times, chronic overspending has become a major problem in this society. The growth of capitalism has created a huge demand for goods and services. It is estimated that about ten percent of the American population has compulsive buying habits. A lot of people are finding themselves without any kind of a savings, or worse, in debt over their head. Not only does this impact individual lives, but it affects businesses as well. Many businesses go under because of a lack of precaution and poor money management.
Personal bankruptcy as a result of overspending is growing rapidly. Some people simply can't control their spending. Credit card bills, installment debt, car and other loan payments can eventually spiral out of control, until finally the borrower is unable to make even the minimum payment on each type of debt. If the borrower cannot access funds from friends or family or otherwise obtain a debt-consolidation loan, then bankruptcy is usually the inevitable alternative. Statistics indicate that most debt-consolidation plans fail for...