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Big Changes In Bankruptcy Law In 2007 Essay

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Big Changes in Bankruptcy Law in October 2005

In April of 2005, the credit card industry won a battle they had been fighting for eight years. They have been lobbying for bankruptcy “reformation”. Creditors argued for it due to an increase of bankruptcies filed between 1995 and 2004 by approximately 700,000. This new law, signed on April 20, 2005, took effect in October 2005. In my investigations of this subject I found my source of information to come from one particular article written by Attorney Albin Renauer. I found this article on www.nolo.com.
This article has enlightened me on the new laws that have taken effect as of Oct. 2005. This new law will make it more difficult for the debtor to file Chapter 7 and Chapter 13 bankruptcy. It will prohibit some people from filing altogether. Debtors who may have been able to file under the previous Chapter 7 terms will find that they will have to file under the new Chapter 13 terms. This will enforce a repayment plan. This new law also has fewer protections from collection efforts. Previously, bankruptcy was an option for nearly everyone and available to almost anyone who applied. Under the new law… there are now tougher guidelines to meet to even qualify for either Chapter. One of the biggest changes in filing for Chapter 7 is one will now have to go through what is called a “means test”. In this test a lawyer will determine, by their states median income, whether or not they can afford to repay your their or eliminate it. For those who can pay as little as $100 a month towards their debt, Chapter 7 is not an option. These people will have to file under Chapter 13 and develop a plan to pay back their debt within three to five years. According to a 1999 study by federal bankruptcy judges, the average person filing for bankruptcy earns approximately $22,000 a year. Even though this is a relatively small income, it will prove difficult to show that they can not play as little as $100 a month towards their debt....

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Big Changes In Bankruptcy Law In 2007. Anti Essays. Retrieved December 18, 2018, from the World Wide Web: http://cassandralynndesignllc.com/free-essays/Big-Changes-Bankruptcy-Law-2007-27129.html