In 2005, new credit card bankruptcy laws were passed. These laws affected consumers in several ways. Here are a few tips to navigating this difficult process to make sure you don’t get ripped off–and eventually get your finances back on course.
Credit Card Bankruptcy Fact No.1: Higher Fees
The new law makes it harder for debtors to prove they can clear their debts. It is called the Fresh Start law for Chapter 7 bankruptcy.
If you decide to file bankruptcy, you can expect to pay higher fees. Attorneys, especially a chapter 7 bankruptcy attorney, are overcharging consumers 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.
Credit Card Bankruptcy Fact No.2: Hold on to Your Assets
Some changes went into effect, which involves Chapter 7/13. If you file bankruptcy, your assets are handed over to your creditors.
This is the fresh start solution. If you file Chapter 13 then you will expect to adhere to a repayment plan for five years. The law has made it difficult for people to file Chapter 7, so most people are forced 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 structure as the fresh start law. If you file bankruptcy, likely you will have to spend a great deal of time in court, give up your assets if you are able to file Chapter 7, or else spend the next five years paying off your debt. (This is not too disimilar from
The law was passed to dissuade consumers from filing bankruptcy to eliminate debt.
Credit Card Bankruptcy Fact No.3: What You Can Do
Because creditors gained billions of dollars as a result, services are available to give you other options over bankruptcy. Under the credit card bailout solution, consumers can erase up to 60 percent of their debts. They don’t have to worry about credit checks, owning a home, etc, which gives the debtors an alternative to bankruptcy.
photo:shawnzrossi
Some services require that you have a job and have at least $10k in unsecured debts to apply. It is worth spending some time online to research all your options, even if you go independent with something like a do it yourself bankruptcy, so you can bring financial sanity back to your life.
Other articles you might like;
- Medical Bankruptcy FAQ – 3 Tips for Deciding If Medical Bankruptcy Is Right for You | Bankruptcy Lawyers
- Understanding Credit Card Bankruptcy | Bankruptcy Solutions
- Understanding Credit Card Bankruptcy | yogathepower.com
- Medical Bankruptcy FAQ | Taxes
- Should I Get A Chapter 7 Bankruptcy Attorney?
{ 52 trackbacks }
{ 0 comments… add one now }