International Legal and Ethical Issues in Business DB Week 2 - Essay Example

International Legal and Ethical Issues in Business DB Week 2 Who may file chapter 7 bankruptcy? Filing chapter 7 bankruptcies can resolve overwhelming debt issue but there are certain conditions to file the bankruptcy. Not everyone is eligible to file for this, and therefore every person who wants to file for it must meet the requirements below:Current monthly income is measured against median income for a family of size relating to state standards. If the income is less than or equal to the median, then he or she can file for chapter 7.

Reasons people file bankruptcyBankruptcy is a course that let people who are no longer able to pay their debt requirements a means to sort out or revive their financial life. The following are reasons for filing: Medical debtSickness, injury and even everyday medical measures can take a financial charge on the person’s finances. Lesser income and added expenses can lead some to file bankruptcy (Elias, Renauer, & Leonard, 2011).Overextended on creditUnproblematic way into debts through credit cards, credit lines or other financial tools allows some citizens to make purchases they are not capable to repay; poor understanding of financial accountability or shopping obligation is frequently the core of reckless spending.

Eventually, these operating expenses can shoot up to the position where the arrears are too much for an individual to pay back (Elias, Renauer, & Leonard, 2011).Decrease in earningsLosing jobs, a mandatory decline in working hours or lesser venture incomes can cause major financial strain on a person. After their investments are exhausted, individuals may find they require filing bankruptcy when they are not capable to counterbalance their decline in earnings with new jobs or substitute earnings opportunities.

To discontinue foreclosureForeclosures of mortgage crop up when a person neglects his or her disbursement plan and financial establishment which embraces the mortgage come to a decision to take back the home. For the duration of this type of bankruptcy process, the sum of money in debts may be bulged into a new reimbursement plan that allows a person to stay in his home (Elias, Renauer, & Leonard, 2011).How bankruptcy affects interest rates on loan and credit cardsWhen individuals proclaim bankruptcy, they can be vindicated from most types of debts at the cost of harshly destructing their credit score.

Given that a credit score is a figure that is inevitable to replicate the risk a particular person who borrows presents according to his tendency to defaulting, bankruptcy is one of the most horrible possible dealings to have on a person’s credit documentation.ReferenceElias, S., Renauer, A., & Leonard, R. (2011). How to file for Chapter 7 bankruptcy. Berkeley, Calif: NOLO.