Tuesday, May 17, 2005


Attention: All of you out there who are in a position to be thinking about filing for bankruptcy need to act quickly or risk losing the opportunity to file under the old bankruptcy laws.

It may already be too late in some areas due to filing delays and over loaded courts. So….. PLEASE….. If you have any thoughts on filing for personal bankruptcy yesterday was too late and there may not be a tomorrow.

The new bankruptcy laws as passed by Congress and signed into effect by President Bush are the most sweeping in years. Maybe the most profound changes for the average filer since the bankruptcy laws were first written are to take effect very shortly.

It will take away many if not most of the basic protections that have existed for those wanting to file Chapter 7 bankruptcy and force them into the much less desirable Chapter 13 bankruptcy repayment procedure.

I’m not going to bore you with the complete list of changes but this bill must have been written by the banks and credit card companies and given to the legislators who sponsored it.

Using the pretense of stopping bankruptcy fraud and misuse Congress has passed and the president has signed into law the worst piece of legislative skullduggery I’ve seen since tea pot dome.

The financial industry has finally gotten their way and the average bankruptcy filer will be the loser. This bill is more to enrich the financial industry than prevent fraud and misuse. What ever the banks and credit card companies spent on buying Congress off on this bill it was a bargain.

Basically the changes that will have the most negative impact are;

No longer will you get as much protection for your vehicles, your home, or other personal property. The protection left under the new law is a gutted version of what it was.

And worse yet are the new rules on how you figure you’re living expenses. Now you will use the IRS amounts allowed under the tax code not your ACTUAL expenses. This results in a much lower allowance for expenses. In many areas of the country the results are so low as to be ridiculous.

That one change alone will result in many filers being kept from Chapter 7 bankruptcy all together by distorting how much a filer has to use for repayment of debt.

That leaves filing for Chapter 13’s bankruptcy repayment their only option. Worse still using these low monthly expense amounts will require much larger monthly payments to pay off the filers obligations. You may be forced out of being able to file under Chapter 7 bankruptcy and then made to pay more under Chapter 13 bankruptcy.

Not fair but be that as it may it’s now the law so be prepared for the worst when you talk to your lawyer.

So now you know. File now or risk being forced to repay at greatly increased monthly payments.

I intend to write more on the new bankruptcy and what it means in a later article but I felt obligated to get this one out ASAP since time is running out for files to avoid this new law.

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