It will be much harder to file for bankruptcy under Chapter 7 and get a completely fresh.
For businesses, relying on the issue of credit is the new personal bankruptcy law is doing great, to reduce personal bankruptcy claims from the thousands of double-digit (short term).
However, lawyers who work with the actual people filing for bankruptcy means that the new law is seriously flawed because it puts more financial burdens already broke clients and reduces potential debt repayment to s
mall businesses.
And then of course you have the credit card companies charge high interest rates, which in very few cases due to bankruptcy in the first place. According to some economic experts, a large proportion of the debt people accumulate is a result of keeping up with Jones and did not think ahead.
For 80% of clients had each month, the debt is credit card related and averages $ 32,000 - the result of six to eight cards. Consumer credit organizations, says the new law allows debt reduction strategies for those who are considering bankruptcy and curb abuses.
Under the new law, it has been a requirement that the person to file for bankruptcy receive credit counseling before and after application, as this person will be charged.
So now the consumer would then know the advantages and disadvantages of declaring bankruptcy. Nevertheless, it is simply a cost to an already financially stressed individual.
People filing bankruptcy in general is not overspenders, but merely facing temporary financial disasters such as medical expenses, layoffs, divorce, gambling debts or other crises. Before you can file bankruptcy, you are now required to complete credit counseling with an agency approved by the U.S. Trustees office.
This credit counseling is designed to help you decide if bankruptcy is appropriate.
Once you've completed your bankruptcy, the law requires you to attend another credit counseling session.
These are new requirements before this law was adopted the law did not require a person to go through counseling either before or after the filing of bankruptcy.
Secondly, under the old law, could a person decides to file under Chapter 7 or Chapter 13 Under the new law, the court will look at your monthly income and applying a means test on the country where you live. If your income is less than or equal to medium income earners and you will be allowed to file Chapter 7, which will effectively give you a clean slate.
This medium income can vary from $ 28,000 in
Under Chapter 13 you will not get a fresh, but will have to make payments on your debts.
Also, your lawyer has now personally confirm that your bankruptcy application is correct. That means more work for the lawyer to higher legal fees.
Advantages of bankruptcy:
Legal protection against creditors
Takes care of all or most debt
In some cases, keeping home and car
To stop the complete financial ruin
Provides a fresh start
Disadvantages of bankruptcy:
Bad Credit
May have to repay the debt in part load and return security to creditors
May lose assets, including house and car (if the house is worth more than a certain amount)
Bankruptcy becomes publicly available and
Remain on the credit record for seven to 10 years
"Earlier, a bankrupt offered a new start for the files," said
If you analyze credit card costs for most people, you will see that they often contain medical bills and day-to-day expenses for the elderly or those serving low or fixed incomes. Records show that 50% of credit card holders not paying their full credit card bills each month.
33% of the population can not afford health insurance, so have to collect their prescription drugs. With the recent Medicaid cuts and stiff bankruptcy law, who knows what will happen to these people.
There are some who say consumers are abusing creditors. The irony is that credit card companies are begging for customers and offer large amounts of unsecured loans, but at the same time, lobbying for stricter debt control.
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