For many Americans, the decision to file for personal bankruptcy is a difficult one. Our nation was built upon the values of hard work and personal fortitude, and for many Connecticut consumers, filing for Chapter 7 bankruptcy is hard to reconcile with those ideals. However, a recently published article suggests that bankruptcy is not the negative economic drain that many believe it to be, and in fact could be a positive tool in economic recovery.
In coming to that conclusion, researchers examined the financial systems of six European nations, and compared the data to our own economic standing. In the European systems, bankruptcy relief is largely unavailable to individual consumers. This results in a system in which families are caught in a cycle of heavy debt loads, reduced employment opportunities and no outlet for debt relief. It is of little surprise that economic recovery or growth is severely stunted in these countries.
In contrast, the availability of bankruptcy relief in America provides something of an economic 'cleansing' effect, allowing consumers to shed high levels of old debt. This places people back into a position in which they can contribute to the economy through spending, which in turn preserves jobs and raise consumer confidence. In this way, bankruptcy can be viewed as a positive economic factor, rather than a negative drain on the nation's economy.
As individual Connecticut consumers, it is imperative that the decision to file for Chapter 7 bankruptcy is made based on the unique needs of each individual or family. Bankruptcy offers a number of solutions to economic woes, and can provide a fresh start. Hopefully, those who have held off on filing due to concerns over the wider economic impact will take comfort in the knowledge that personal bankruptcy is not a negative factor.
Source: moneynews.com, "MarketWatch: Bankruptcies May Be Helping America Grow," John Morgan, Feb. 8, 2013