In 2005, new credit card bankruptcy laws were passed. The laws impacted consumers in numerous ways. Below are a few ways to navigating this challenging process, to ensure you do not get ripped off-and hopefully get your finances back on track.
The new law makes it tougher for debtors to show they can clear their debts. It is termed the Fresh Start law for Chapter 7 bankruptcy.
If you were to file bankruptcy, you will pay higher fees. Lawyers, especially a chapter 7 bankruptcy lawyer, are overcharging individuals now.
The rates were expected to rise to 100%, which accounts for the increased liability imposed upon consumers from the new law-which can drastically raise the cost of bankruptcy. Consumers can also expect to spend more time filing documents.
Hold on to Your Assets
Some changes went into effect, which involves Chapter 7/13. If you file for credit card bankruptcy, your assets are handed over to your creditors.
This is the new solution. If you file Chapter 13 then you can expect to stick to a repayment plan for 5 years. The law makes it difficult for people to file Chapter 7, hence most people are pushed to file Chapter 13.
As a result of these new laws, creditors recovered a billion dollars. These fresh start laws have made it difficult for anyone to file bankruptcy-whether of the credit card version or some offshoot like medical bankruptcy.
You must attend meetings, go to counseling, and participate in other activities before the judge will even consider your case. Therefore, it makes more sense to find other alternatives to bankruptcy. Okay, but what about credit card bankruptcy?
Credit card bankruptcy falls under the same framework as the fresh start law. In the event you file bankruptcy, likely you will need to spend a great deal of time in court, surrender your assets should you be able to file Chapter 7, or else spend the next 5 years paying down your debt.
What You Can Do
Because creditors gained millions of dollars consequently, services are available to provide you with other options over bankruptcy. With the credit card bailout option, consumers can reduce up to sixty percent of their financial debt. They do not have to worry about credit checks, possessing a home, etc, that gives the debtors an alternative to personal bankruptcy.
Some services ask you to have a job and have a minimum of $10k in unsecured debts to work with. It is worth taking the time online to research all your choices, even if you go independent with something similar to a diy bankruptcy, in order to bring financial peace of mind back to your life.
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