Bankruptcy Law Changes Not Open For Interpretation

The Bankruptcy law in the past used to be easier as they are less strict, rigid and demanding. It was very easy for one to file for bankruptcy. But too many people took advantage of interpreting the law to their advantage, filing for it just to get out of any financial obligations they can’t make that the government decided to impose stricter measures when it comes to filing for it. That’s why the Bankruptcy Abuse Prevention and Consumer Protection Act  was created in 2005 to ensure that everything about bankruptcy is stated straightforward so that there would be no room for all sorts of interpretation than what it really is all about. Nowadays, you need to scrutinize the new bankruptcy law and see if you qualify before you can actually file for one.

What are the changes in the new bankruptcy law?

For starters, you can no longer choose what chapter of bankruptcy you can file. Once you can file for a certain chapter (for example, chapter 7), you cannot proceed like you used to do. If you are filing for bankruptcy, you can no longer value your own property at auction prices. The new law has set fixed value for properties that will be repossessed using retail pricing. This would make selling repossessed property so much easier.  The actual value of your property will be determined by the laws of the state where you have resided in the last two years. The bad thing here is that the law will determine how much you will be getting for your food and other expenses which is usually just $1,000 a month so unlike with the old law that you can still maintain your way of living despite filing for bankruptcy.

And it isn’t just the bankruptcy law that has changed. Even credit card companies have modified their system as well to allow people to make minimum payments monthly. With this kind of method, people will be paying more than what they usually pay if they pay the total bill owed to their credit card. Bankruptcy lawyers charge a whole lot more too as they have to ensure that all requirements are met before filing for bankruptcy. And with the increasing costs of filing fees, some people are forced to file chapter 13 instead of chapter 7 which makes them more responsible in settling their debts.

One good thing about the new bankruptcy law is that due to its restrictions, people are discouraged from filing it so it encourages people to live within their means.

Are you filing for bankruptcy but just don’t know how? Find a Bankruptcy Lawyer today!