Will New Bankruptcy Law make it more difficult for people in debt to make deals with their creditors?
If people are unable to file for bankruptcy, it seems that the credit card companies would be less willing to work out a compromise. Any thoughts?
Thanks,
Jeff
this law is another example of what bush does for his friends. I
this law is another example of what bush does for his friends. It was passed to make his friends rich. It will definitely make it harder to negotiate for a lower settlement amount since now the credit card companies know we can not file for bankruptcy if they push us too hard :x :x :x :x :x
Its sweet and sour
Title II - Subtitle A - Section 201 (or Penalties for Abusive Creditor Practices under Enhanced Consumer Protection ) says
Quote:
Cites circumstances under which the court may reduce a claim based upon unsecured consumer debts by up to 20 percent if the debtor can show by clear and convincing evidence that the claim was filed by a creditor who unreasonably refused to negotiate a reasonable alternative repayment schedule proposed by an approved credit counseling agency acting on the debtor's behalf. |
Now creditor will have to give debt settlement a chance. But the summary of the law says, "Cut short your expenses". This law is aimed to discourage reckless spending.
Vikas
Re: New Bankruptcy Law
[quote=jeffh]Will this new law, The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, that congress is about to pass make it more difficult for people in debt to make deals with their creditors?
If people are unable to file for bankruptcy, it seems that the credit card companies would be less willing to work out a compromise. Any thoughts?
Thanks,
Jeff[/quote]
This new law doesn't prevent people from filing bankruptcy. Instead, this bill forces people (over a certain income bracket) into the type of bankruptcy that would require them to repay their debts. It forces people into chapter 13 which is the form of bankruptcy that has the tougher repayment standards (compared to chapter 7). The law actually requires one to undergo credit counseling 188 days before filing for bankruptcy. during this time period the counselor works with the person in debt in order to develop a plan for repaying the debts.