New Bankruptcy Law In Place
I’m always amazed at how many people go bankrupt each year. Last year the number of bankruptcies was around 1 1/2 million filings. With the new bankruptcy law in effect, it is estimate that bankruptcies may drop as much as 20% in the coming years. That is still a lot of bankruptcies. Hopefully the new law will do the following:
- better protect people who have large hospital bills, lose their job, or experience an unforeseen tragedy
- not protect people that are just trying to get over on the rest of us
- not encourage more financial institutions to loan more money at high interest to people that are over extended on their credit
E-Commerce Times posts: New Bankruptcy Law Puts Squeeze on Debtors. President Bush signed the biggest rewrite of U.S. bankruptcy law in a quarter century today, making it harder for debt-ridden Americans to wipe out their obligations. “Bankruptcy should always be a last resort in our legal system,” Bush said. “If someone does not pay his or her debts the rest of society ends up paying them.”
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Under the new law, those with insufficient assets or income could still file a Chapter 7 bankruptcy. Those with income above their state’s median income who can pay at least US$6,000 over five years — $100 a month — would be forced into Chapter 13, where a judge would then order a repayment plan.