 Bankruptcy laws were changed significantly when the bankruptcy code was re-written in October of 2005, offering far fewer benefits for borrowers trying to get out from under their debt obligations. Once in place, the overhaul pointed most bankruptcy filings to a chapter 13, with tighter restrictions, re-payment of debts, and a much longer time from start to finish. Consumers in a chapter 13 filing typically have a “workout” period where payments are made to creditors until the debt is satisfied, a process that can take three to five years. The overhaul allows creditors to act aggressively if terms are not met by the consumer. For example, a bank can now start foreclosure immediately if the borrower misses even one payment. The relatively quick 8 month process, dismissals of debt, and essentially fresh start status provided by a chapter 7 filing have essentially been eliminated for but the most destitute of filers.
While many of the advantages of filing bankruptcy were eliminated, the disadvantages remain firmly in place. A bankruptcy filing can stay on your credit reports for up to ten years, making it difficult, impossible, and/or more expensive to obtain consumer loans, credit cards, and/or a mortgage. An increasing numbers of employers will refuse to hire applicants with a bankruptcy filing. Bankruptcy filings are also a very public event, usually announced in local papers and available to anyone seeking that kind of information
Consumers now have many choices and ways to deal with financial difficulty. Learn how to manage and ultimately eliminate debt without filing bankruptcy and it’s likely you will have chosen a much better path for yourself and your family.
|
Home
