Whether or not to reaffirm a secured debt, under §521(2)(A) of the Bankruptcy Code, used to be a no-brainer. Because the act of reaffirmation did far more for the creditor than it did for the debtor, the advice most commonly - and properly - given by bankruptcy attorneys to their clients was as follows: If you want to keep the property securing the debt (most commonly the debtor’s house or car), select the option known as ‘retain and pay’. The creditors’ urgings for reaffirmation could generally be ignored without serious consequences.

But all that changed under the BAPCPA, effective October, 2005. As of this writing, the majority of districts having ruled on the issue do not, under the new bankruptcy law, recognize the ‘retain-and-pay’ option. That is, if a debtor attempts to proceed under that option, there is a very good chance that the creditor may file an adversarial action challenging the debtor’s option.

Upon filing a Chapter 7 bankruptcy petition, a debtor must, within 30 days of that initial filing date, file a ’statement of intention’ with respect to any debts secured by assets of the bankruptcy estate. The debtor then has, under §521(2)(B), 30 days from the first date set for the §341 creditors’ meeting to “perform his intention” (e.g. file a reaffirmation agreement) with respect to the secured property. With respect to that statement of intention, the options are as follows:

Surrender

The easiest option for the debtor is simply to surrender the asset to the secured creditor. For example, the debtor’s vehicle may be worth less than the amount owed to the lender. If the debtor is finding the monthly payment to be onerous, it may make sense for him to simply allow the creditor to retake possession of the vehicle. After the creditor sells the car at auction there is typically a deficiency, which debt is simply discharged along with the rest of the debtor’s unsecured debts.

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Whilst attention has focused on high-profile corporate bankruptcies like that of Lehman Brothers, new figures revealed by the Insolvency Service show many individuals are going bankrupt - and more and more are women.

In the last 6 years bankruptcies amongst women have risen nearly fourfold. In fact they now make up 40 per cent of all bankruptcies with younger women under the age of 35 most likely to suffer financial collapse.

The figures from the Insolvency Service revealed that last year 23,173 women were declared bankrupt, up from only 6,641 in 2002. With men the figure was 37,972, that’s roughly 250 per cent higher than the 15,741 which were declared bankrupt in 2002.

This means that six years ago women made up 30 per cent of bankrupts, but by last year that had risen to 38 per cent.

In general, people aged between 35 and 44 are most likely to go bankrupt. But among women it’s the younger ones that are most at risk, the 25 to 34 year olds.

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Bankruptcy fraud is a serious crime that could lead the borrower into being put in jail. It could could cause an individual to be denied discharge after the case has ended. It is important for anyone considering to engage in insolvency fraud to realize that not only will they be hurt but many more people will be affected by this action. An individual should also know that the court has the authority to refuse them discharge if fraud is detected.

The first lot of people who are hurt by bankruptcy is those who pay tax. The government, in trying to track down and prosecute the criminals who commit fraud uses a lot of money paid by the taxpayers. The government has to pay the detectives and other officials involved in the process of tracking down the criminals.

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