Bankruptcy Law Changes

In 2005, bankruptcy law changes went into effect. The problem that needed to be addressed was the occurrence of many people filing bankruptcy several times in a limited amount of time. This was not good for credit card companies and in turn to afford this increased cost, interest rates that were being charged were often raised. Yet, the overall problem here is that it becomes very much necessary to handle the changes in bankruptcy laws in your personal situation now. The changes that have been made are not ruling out the ability to file bankruptcy but they are making it harder to do for the wrong reasons. Anyone can work through their situation for the better, now.

What Changes You Need To Know

The most important change to the bankruptcy law is changes to the process of filing. Now, you will need to file bankruptcy only after you have taken the time to work through consumer credit counseling and Chapter 13 bankruptcy. In these programs, you will be required to try to work out a plan to repay what you owe. During this time which is a minimum of six months, you must show that you are working to pay down your debt. Generally, creditors will reduce or eliminate the credit card's interest and you will be required to pay off what you owe as much as possible. Your lines of credit are closed.

There are other bankruptcy laws change that has happened as well. For example, your bankruptcy attorney will need to work with you to determine if you even qualify. They can not encourage you to file nor can they tell you that it is the best thing in an effort to gain your business. They will be required to show that you do need to file and that there are no other ways out. You are also restricted from filing bankruptcy over and over again. Now, you must wait several years before you can file again. In that time period, you can't rack up the credit card debt and expect it to be paid off again.

These bankruptcy law changes are important to know. In many ways, bankruptcy law change is for the better to help people to get out of debt without filing. Yet, knowing the bankruptcy laws rules and new changes can help you to determine if you should file and if so, how you will make it happen.