Bankruptcy laws, which were considered to be consumer friendly at the time, were changed significantly when the bankruptcy code was re-written in October of 2005.

Since being put in place, the new version of the code requires consumers to take a state means test to determine which type of bankruptcy that consumer qualifies for.

If it's determined that income is above the state mean (average), the consumer will most likely be put in a chapter 13 bankruptcy. Most of the filings are pointed toward a chapter 13, with tighter restrictions, re-payment of debts, a much longer time from start to finish, and far fewer benefits for borrowers trying to get out from under their debt obligations.
 
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 takes five years. The overhaul allows creditors to be much more forceful in their actions against consumers if terms of the bankruptcy aren’t followed. For example, a bank can now start foreclosure immediately if the borrower misses even one payment.

While many of the consumer friendly aspects of filing bankruptcy were eliminated, the negatives remain firmly in place. A bankruptcy filing stays on your credit reports for twelve years, making it difficult, impossible, and/or more expensive to obtain consumer loans, credit cards, and/or a mortgage. Employers in increasing numbers will weight bankruptcy filings against job applicants. Bankruptcy filings are also a very public event, usually announced in local papers for neighbors, friends, and parents to read about.

Consumers now have many choices and ways to deal with their financial difficulty. More information can be found here CLICK HERE

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Call Beata at  The Debt Counseling Center at 888-443-3280 Ext 212 to 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.