New Bankruptcy Law ? Five Essential Things to Know

Last April, Congress passed the Bankruptcy Abuse and Consumer Protection Act, the most sweeping reform of our nation's bankruptcy laws in more than twenty-five years. Proponents of the bill argue that most consumers who file for bankruptcy do so simply because they do not wish to pay their bills. That is an arguable point, as studies show that most bankruptcy filers have suffered illness, injury or job loss. Regardless of the reasons, Congress has made the changes, and millions of Americans will be affected when the new law takes effect on October 15.

Here is a short list of the changes and how consumers will be affected.

  • Goodbye, Chapter 7 ? Until now, most consumers have been permitted to file under Chapter 7 of the Federal bankruptcy code. Chapter 7 permits the court to wipe away most consumer debt, allowing the debtor to make a fresh start. The new law establishes a "means test." Anyone with income that exceeds the median income for his or her state will have to file under the stricter Chapter 13 instead, which requires a repayment schedule of up to five years.

  • Attorney problems ? The more complicated Chapter 13 filings will make it necessary for filers to hire an attorney. Most attorneys who practice bankruptcy law are already reporting dramatically increased business; some are even turning clients away. If you need an attorney, hire one now, as they are soon going to be very busy

  • More attorney problems - The law also leaves lawyers legally responsible for the accuracy of the information filed on their clients' behalf. This has led most lawyers to increase their fees. Some, including those who do bankruptcy work on a pro bono, or free, basis, have decided to forego bankruptcy work altogether. In short, it will soon be more difficult and more expensive to hire an attorney.

  • Mandatory credit counseling ? Congress has required that debtors obtain credit counseling from an approved agency within six months of filing for bankruptcy. As of now, this requirement is largely undefined, with rules, regulations, and qualifications for counselors still up in the air.

  • Expect to may more bills ? Some obligations, such as student loans or taxes, must be paid in full even after a bankruptcy filing. The new law lengthens the list of debts that cannot be forgiven.

    • The new legislation, rightly or wrongly, makes it more difficult, more time consuming and more expensive for a debtor to file for bankruptcy. Consumers who are considering doing so should act now, as the regulations will soon become stricter. Bankruptcy should always be a last resort option, but if you cannot avoid it, you should act quickly.

    ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to establishing credit, debt consolidation and credit counseling.

    In The News:

    Google News
    Updated : Fri, 10 Oct 2008 17:49:09 GMT

    Coleman calls off negative ads - Minneapolis Star Tribune


    MinnPost.com
    Coleman calls off negative ads
    Minneapolis Star Tribune - 24 minutes ago
    By Patricia Lopez, Star Tribune ...and it has nothing at all to do with several outlets (including one of Franken's ads) letting us know that a Coleman ad that wants us to … read more see Franken looking out of control/angry, is actually video of ...
    Coleman: I'll remove negative ads and urge others to do same Pioneer Press
    Coleman says he'll pull negative ads to focus on economy Minnesota Public Radio
    KAALtv.com - The Hill - The Associated Press - OpEdNews
    all 460 news articles

    Publ.Date : Fri, 10 Oct 2008 17:25:04 GMT

    NATO agrees on Afghan drug role for military - The Associated Press


    Boston Globe
    NATO agrees on Afghan drug role for military
    The Associated Press - 1 hour ago
    BUDAPEST, Hungary (AP) - NATO defense ministers Friday authorized their troops in Afghanistan to attack drug barons blamed for pumping up to US$100 million (euro74 million) a year into the coffers of resurgent Taliban fighters.
    NATO Joins Drug War in Afghanistan Voice of America
    NATO to Hit Drug Trade in Afghanistan New York Times
    AFP - Bloomberg - International Herald Tribune - Times Online
    all 1,309 news articles

    Publ.Date : Fri, 10 Oct 2008 16:11:48 GMT

    Help Support Breast Cancer Awareness With Lifespring Health - MarketWatch


    ChattahBox
    Help Support Breast Cancer Awareness With Lifespring Health
    MarketWatch - 1 hour ago
    Lifespring Health will be Donating $5 to the Susan G. Komen Foundation Each Time you Shop Online This Month SUNNYVALE, Calif., Oct 10, 2008 /PRNewswire via COMTEX/ -- October is breast cancer awareness month!
    Go "Passionately Pink for the Cure" on Oct. 17 Atlantic News Telegraph
    Panera Bread to sell pink bagels Times Herald-Record
    SkinInc.com - BurlingtonFreePress.com - Chambersburg Public Opinion - Penn State Worthington Scranton
    all 68 news articles

    Publ.Date : Fri, 10 Oct 2008 16:05:31 GMT

    UPDATE 1-Bush says US moving quickly to solve market crisis - Forbes


    Canada.com
    UPDATE 1-Bush says US moving quickly to solve market crisis
    Forbes - 1 hour ago
    WASHINGTON, Oct 10 (Reuters) - President George W. Bush said on Friday the US government was moving aggressively to address the financial markets crisis, but he acknowledged that anxiety was feeding on itself as stocks continued to plunge.
    Bush appeals for confidence CNNMoney.com
    Bush Says Markets Must Remain Calm Despite Challenges Washington Post
    Reuters - The Associated Press - TheStreet.com - CNN
    all 1,456 news articles

    Publ.Date : Fri, 10 Oct 2008 16:33:45 GMT

    Eagles' Westbrook out for Sunday's game - Sports Network


    Sports-Odds.com
    Eagles' Westbrook out for Sunday's game
    Sports Network - 28 minutes ago
    Philadelphia, PA (Sports Network) - Philadelphia Eagles running back Brian Westbrook will not play on Sunday at San Francisco. Westbrook, who has been hampered by a sprained ankle he suffered in the Week 3 victory over Pittsburgh, fractured his ribs in ...
    Brian Westbrook: Ruled Out Rotowire
    Les Bowen: Eagles vs. 49ers: The pick Philadelphia Daily News
    WILM News Radio - NFL News - Kansas City Star - The Associated Press
    all 642 news articles

    Publ.Date : Fri, 10 Oct 2008 17:20:18 GMT

    A Cautious Approach to Gardasil Shot - U.S. News & World Report


    Canada.com
    A Cautious Approach to Gardasil Shot
    U.S. News & World Report - 34 minutes ago
    News today cheering the fact that 1 in 4 teen girls has received the Gardasil vaccine sounds to me like some serious spin from the Centers for Disease Control and Prevention, the government agency pushing girls as young as 9 to get the shot.
    Cancer Vaccine Used by 25% of Girls 13 to 17 New York Times
    Quarter of adolescent US girls received HPV vaccine Reuters
    WebMD - dBTechno - Wall Street Journal - eFluxMedia
    all 463 news articles

    Publ.Date : Fri, 10 Oct 2008 17:14:13 GMT

    States probe possible voter registration fraud - Chicago Tribune


    ABC News
    States probe possible voter registration fraud
    Chicago Tribune - 1 hour ago
    Questions about possible cases of fraudulent voter registrations were being raised this week as officials in several states investigated hundreds of questionable or duplicate registration forms submitted by an advocacy group.
    Carnahan statement on ACORN registration mess Kansas City Star
    Republicans try to tie Obama to vote fraud cases Boston Globe
    ABC News - Pittsburgh Tribune-Review - Inter Press Service - MyFox Tampa Bay
    all 1,193 news articles

    Publ.Date : Fri, 10 Oct 2008 16:48:10 GMT

    RSS Feed Reader
    Website Traffic Promotion


    PARLOT::Ebooks, Scripts, Websites, and more...

    Adsense websites

    Debt Collectors; And what you can do to Get Them Out of your Life

    FTC opinion letter on validation Section 809(a) of the FDCPA,... Read More

    Bank Like a Banker

    The business of banking has changed dramatically over the last... Read More

    Debt Free and Carefree

    Are you still clearing a mountain of debt amassed last... Read More

    The Last Debt Solution Should Be Bankruptcy

    A debt solution like bankruptcy should really only be used... Read More

    How to Protect Yourself: Debt Collections

    So you are getting collection calls? You're desk is full... Read More

    Corporate Debt Management ? Perspective on the Why

    Entrepreneurs have a tough time in their formative years. They... Read More

    What is Debt Settlement and How Does it Work?

    Debt settlement involves negotiating with a creditor or creditors to... Read More

    The 5 Secrets to Getting Out of Debt Fast

    As they stare down at a teetering pile of bills,... Read More

    Debt Getting You Down? - Make a List!

    Debt is not much fun and when faced with it,... Read More

    The Bankruptcy Code Acknowledges the Validity of the Homestead Exemption

    Many times the subject of bankruptcy seems baffling in its... Read More

    Credit And Debt Relief--A One Stop Solution

    Amy Wright, 34, was extatic when her realtor showed her... Read More

    Credit Repair - Understanding The Basics

    What is Credit?Credit means that you are using someone else's... Read More

    Credit Card Debt & the Unfairness of the Universal Default Clause

    Let's look at a real world example: A woman purchased... Read More

    Debt Problems? You Can Negotiate With Your Creditors

    It is always possible to negotiate with creditors ? even... Read More

    5 Methods Toward Reducing Your Debt

    Decreasing your debt is paramount to having a good credit... Read More

    Fast Track Out of Debt

    You go to the mail box and scan - a... Read More

    Is Debt Negotiation Bad?

    Educating yourself about the ins and outs of debt negotiation... Read More

    Debt: Dont Pay Your Minimum Balance

    Almost all Americans carry credit card debt. Actually, over 40%... Read More

    Bankruptcy, Is It A Way Out

    Negotiations with creditors have failed. Repossession is imminent and foreclosure... Read More

    Personal Bankruptcy: Last Option To Legally Stop Bill Collectors

    Do you have stacks of unpaid bills?Are you in debt?Are... Read More

    Turning Bad Debts into Good Debts through Investing Fundamentals

    If you've ever earned enough money to put some aside,... Read More

    Budget the Luxuries First!

    Strictly speaking, his advice was preceded by another Heinlein maxim... Read More

    Your Secret Weapon... A Budget

    For many, the word 'budget' immediately sends shivers down the... Read More

    What Is A FICO Score?

    Your FICO score or credit score as it's commonly called... Read More

    4 Simple Ways to Solve Your Debt Burden

    Getting Behind Getting behind on your debts owed can be... Read More