The New Bankruptcy Law Will Soon Be In Effect

The new bankruptcy law will soon be in effect

The new bankruptcy laws will be in effect before the end of the year. This is devastating news to those who are already in debt or facing possible future debt. However this is good news to most businesses no longer having the need to file for as much profit loss as some had to in the past.

Once the new bankruptcy law goes into effect it will be almost impossible for some individuals to file for bankruptcy. Chapter 13 bankruptcy will be the most likely step anyone can take to file at all.

Chapter 13 bankruptcy is more like debt consolidation. Unlike the other options of filing like Chapter 7. Chapter 13 does not liquidate your assets and pay for any of your debts. The individual is still responsible for paying off their debts. It is a plan that is determined by the courts and payment arrangements are then made. Unlike going through a debt consolidation service your allotted time to pay of your debts is determined by the courts.

With the future change in the bankruptcy laws people should start planning new ways to avoid the need to ever file.

A mistake that is often made by people is over use of their credit cards. Most individuals do not have a back up plan if they were to ever face a loss of income. If they were to be laid off from their job or face an injury that took them out of work for an extended period of time. How would they pay off their minimum credit card payments? Other things like mortgage and car payments are another factor. Another mistake is not having medical insurance for unexpected hospital bills if one was to get into any accident or suffer a major illness. Most individuals are not prepared to pay those kinds of expenses.

Putting extra monthly cash into a savings account is one way to plan for future unpredicted expenses. Having a financial back up plan is a good strategy to avoid the need to ever file for bankruptcy.

A major cause to the change in the bankruptcy laws is do to some people abusing their credit cards and then filing to erase their mistake. Also some people have made the same mistake and have filed more then once.

There are a lot of people that find this decision unfair. Unfortunately we can not change the decision that was made by our federal government. Those who did nothing wrong to fall into debt will have to pay the same price for those who have abused the system.

All we can do as a whole is carefully plan our financial needs and have a back up plan to avoid falling into debt. Eliminate the need to ever have to file for bankruptcy.