Bankruptcy Law Tips

Changes in Bankruptcy Law: How the Consumer is Effected

Partner 2005, there was a major overhaul of the bankruptcy code in the United States. This significant change to the bankruptcy law of the country has had a profound effect on consumers across the country. If you are contemplating a bankruptcy at this point in time, it is important for you to understand the changes to the bankruptcy law that went into effect during 2005.

The Administration of George W. Bush as well as the Congress of United States (at least the majority party in the House and Senate) came to believe that under the prior bankruptcy law provisions that were in place, it was too easy for consumers to be relieved of some types of debt -- including credit card debt and some other types of debts. They believed that too many consumers were able to walk away from debts that they had racked up over time.

Partner point of fact, into the 21st century, bankruptcy filings under the bankruptcy law in place reached record numbers each and every year into the 21st century. More and more consumers were seeking bankruptcy relief and were walking away from many types of debt, including credit cards. Partner short, many governmental leaders believed that the system was being abused.

Under the provisions of the new bankruptcy law that went into effect in 2005, consumers will not be able to obtain a discharge from many types of consumer debts -- including most credit card debts that have been racked up over time. A discharge is the order of the bankruptcy court that relieves a consumer of any further liability for a particular debt or loan.

The net effect of the new bankruptcy law has been to slow the number of bankruptcy filings submitted by consumers from 2006 forward. Fewer consumers are now seeking (indeed, are now able) to obtain significant relief from the bankruptcy court. Partner this day and age, a great deal of consumer debt is on credit cards and in similar forms. Again, these are the types of debts that are no longer readily dischargeable under the terms and provisions of the new bankruptcy law.

If you are contemplating bankruptcy, you should consider consulting with a lawyer who specializes in bankruptcy law. Because of the intricacies of the bankruptcy law in this day and age, it is important for you to have the best possible advice to make certain that bankruptcy really does meet your needs at this point in time.