Reviewing New Bankruptcy Law Changes

There are certain things in life that we wish to avoid or even prefer not to think about even for one second, but the benchmark of true maturity involves the ability to not shirk responsibilities when they arise.

For anyone who is dealing with debt and might possibly be facing the unfortunate situation of having to file for bankruptcy, the need to research and understand any new bankruptcy law changes is a responsibility that all should pay attention to.

One of the reasons that a person should pay close attention to any new bankruptcy law changes is that the ability to file for bankruptcy has become much more difficult. The laws and criteria need to be met in order to file for bankruptcy protection have become much more stringent then they have been in the past. This does not mean that people are barred from filing for bankruptcy, it just means that properly presenting a case for bankruptcy that outlines that the requirements have been met.

Unfortunately, due to some of the more unscrupulous bankruptcy lawyers in operation, many people filed frivolous bankruptcy claims. This lead to a number of increased insurance premiums, higher interest rates on credit cards and a host of other problems. After ignoring the issue for many years, the government finally took action with some fairly draconian new bankruptcy law reforms.

Under the original bankruptcy laws, a person filing for Chapter 7 bankruptcy was required to liquidate all assets and upon doing so, the remaining debt was cancelled allowing the person to start over, so to speak. In 2004 alone over 1.1 million people filed for bankruptcy protection. With the new bankruptcy law that went into effect, it is extremely difficult to be approved for a Chapter 7 filing and most applicants will have to apply for Chapter 13 bankruptcy which means they will be placed on a five year repayment plan.

Needless to say, some are not to thrilled with such a new bankruptcy law reform. The lenders, particularly the credit card industry, are extremely happy with such a reform. Under Chapter 7 bankruptcy, credit card companies get the proverbial shaft so to speak when it comes to collecting the money that they are owed. With the Chapter 13 filing, credit card companies have a significantly greater chance of getting the bulk of money that they are owed back.

Again, it is not impossible to achieve an affirmative response to a Chapter 7 filing, but it will probably require the precise work of a bankruptcy specialist in order to present the proper case to the bankruptcy court so as to gain the affirmative response.   As such, it is imperative to locate a qualified professional and review the situation with him.