Bankruptcy Law Changes - The Bad

The purpose of the new legislation, President Bush signed into law Which Recently, is to eliminate the So-Called "bankruptcy of convenience." Supporters of the bill allege That Most personal bankruptcies are Brought about by compulsive Those with drug, gambling or shopping problems, And That Such people simply do not want to Pay Their Bills.

Studies Show That Most bankruptcies are Actually Brought about by injury, illness or job loss. Nevertheless, the law passed with the overwhelming support WAS Of Both parties in Congress, and it reads like a love letter to the credit card companies. Here's What It Means for Those with debt problem:

Those considering filing for bankruptcy will Have to pass a test MEANS. This Will Determine the UK Debtors A Certain income is above threshold. Most people will Qualify.

If you pass the test MEANS clustering, No longer will you be allowed to file for bankruptcy under Chapter 7 of the Bankruptcy Code Chapter 7 allowed the courts to wipe away all personal debt in order to give the Debtor a fresh start.

Instead, Debtors Will Have to file under Chapter 13, Which Requires a five year repayment plan of personal debt. If you incure debt, You Will Have to repay it. It's pretty much as simple as that.

In Addition, there are no::: provisions for illness, job loss, accident or injury, or identity theft. If someone steals your identity and runs up tens of Thousands of dollars in debt in your name, You Will Be Held Responsible For It.

Attorneys Who Represent Debtors will now be Held Responsible for the accuracy of the information presented to the courts in bankruptcy cases. Because of this provision, It Is Likely That many attorneys who handle bankruptcy cases will stop handling them. Continued to others who do know Will Probably Raise Their rates substantially in order to cover the additional liability.

Bankruptcy Law Changes - The Good

Members of Congress who sponsored the changes in the law rightly Have Pointed Out That the cost of bankruptcy to two Irresponsible spending runs into the billions of dollars, and Those costs are passed on to the consumer in the form of higher interest rates on credit cards. With a lot of Those costs eliminated through the new legislation, the credit card companies will Have Reduced costs, and will pass the savings on to the Consumers in the form of lower interest rates.

They will not.

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