Amendments to the Bankruptcy Law - The Bad

The aim of the new legislation, which President Bush recently signed into law, is the elimination of the so-called "bankruptcy of convenience." Supporters of the law have argued that most Privatkonkurse be brought by those with compulsive drug use, gambling or shopping problems, and that these people simply do not want to pay the bills.

Studies show that most of the failures are actually caused by the injury, loss of job or illness. Yet, the law with overwhelming bipartisan support in Congress, it was decided, and reads like a love letter to the credit card companies. Here's what it means for people with debt problems:

This test is to file for bankruptcy is a test of means. This will determine whether the debtor has income above a certain threshold. Qualified people.

When you pass the means test, will not be allowed, the bankruptcy proceedings under Chapter 7 of the Bankruptcy Code file. Chapter 7 allows judges to sweep away all the sins of individuals, so that the debtor a fresh start.

Instead, the debtor under Chapter 13, which five years of repayment of the debt requires personal files. When you create the debt, you must return them. It 'much easier.

Furthermore, no provisions exist for the disease, loss of job, accident or injury, or theft of identity. If someone steal your identity and run up to tens of thousands of dollars of debt in your name, you will be responsible for them.

Lawyers representing the debtor is now responsible for the accuracy of the information to the courts in case of bankruptcy filed. Because of this provision, it is likely that many lawyers to handle cases of bankruptcy, the login stops dealing with them. Others, that this will probably increase their prices significantly in order to cover the additional responsibilities.

Amendments to the Bankruptcy Act - The Good

Members of Congress who sponsored the changes in the law correctly pointed out that the operating costs of bankruptcy due to irresponsible spending billions of dollars, and those costs to consumers in the form of higher interest rates on credit cards delivered. With a lot of these costs are eliminated by the new law, the credit card companies have reduced costs and the savings passed on to consumers in the form of lower interest rates.

Are not.

There is nothing good about this legislation for the consumer. Since October 2005, the declaration of personal bankruptcy and is not responsible for the most useful part of consumers.

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