The New Bankruptcy Law Not Good For The Consumer
In the past, people had many options under the bankruptcy laws to protect them if they got over their heads into debt. The new bankruptcy law changed all that. Even the relatively simple prospect of buying a car after bankruptcy has changed.
In fact, under the new bankruptcy law, the more equity you have in your home, the greater the chance you’ll have to use it to pay off your creditors, thus increasing the chance that you’ll forfeit it through foreclosure. The new changes in the law make filing for bankruptcy more expensive, making it more difficult for the people that really need it to take advantage of it. In addition, the new law, instead of wiping out some debts that would have been dissolved under the old bankruptcy bill, will force the person into a repayment plan. And all of this information will go on your bankruptcy credit report entries.
There are also a bunch of new fees that makes filing for bankruptcy more of a hardship for people already having financial problems. You’ll be required to attend financial counseling both before and after filing for bankruptcy, which you’ll be required to pay for. The bankruptcy law is much more complex, which means that your lawyer fees will be higher.
The prior bankruptcy laws were predicated on a belief that a person who had worked all his life, paid his bills on times, and was generally a good citizen, could have a chance to wipe the financial slate clean and start over in the event that through circumstances out of his control, he was unable to pay his bills. Sure, the system was taken advantage of by some, but in a society of laws, that’s unavoidable.
And, yes, some changes were probably needed in the old bankruptcy laws as some provisions were archaic and out of date. But making changes should not mean that you take away the safety net for people. Especially when the debt situation that many of these people found themselves in were surely worsened by the outrageous late fees, percentage hikes, and other “profit centers” built into the lending practices of most of the major credit card companies.
For more information and articles about chapter 7 bankruptcy information / articles, please go to David Hoyer’s site.
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