Congress recently passed sweeping legislation that will significantly reform American bankruptcy law. Designed to eliminate the "convenience bankruptcy" of compulsive gamblers and the financially irresponsible, this legislation will make it more difficult for those seeking bankruptcy protection from the courts to have their debts relieved.

Under current law, people who have debts that they cannot repay may file under Chapter 7 of the Federal bankruptcy code, which allows nearly all debts to be wiped away. The new legislation, which takes effect in October, 2005, will require most people filing for bankruptcy to file under Chapter 13 instead. Chapter 13 requires that a repayment plan be established, usually over a period of five years. Chapter 7 filings will still be an option, but the new legislation includes a "means test" that examines the filer's income to determine whether Chapter 7 or Chapter 13 is appropriate.

With the new law set to take effect, the number of people inquiring about Chapter 7 bankruptcy filing has increased dramatically. Attorneys who specialize in bankruptcy law have reported that their phones are ringing constantly, as people who are in financial trouble are wondering if they should file for bankruptcy immediately. While this is good for business, many attorneys are a bit concerned about the sudden rush to file for bankruptcy.

While filing for bankruptcy may be the only option for some people, it is not something to undertake in haste. Bankruptcy stays on your credit report for a minimum of ten years, and can your ability to obtain auto loans, mortgages or even jobs in the future, even if you have established financial stability. Bankruptcy should not be entered into lightly, and should be considered only as a last resort. Many creditors will work with those who owe them money, and it may be possible to establish a repayment plan without filing for bankruptcy.

If you feel that your financial situation is serious enough that bankruptcy is a possible option for you, you may wish to speak to a credit counselor or bankruptcy attorney now. There are still five months remaining before the new legislation takes effect; this should provide most people with ample time to examine their options carefully. What you should not do is rush into filing a bankruptcy petition that may turn out not to be necessary. A rush to beat a five-month deadline may haunt you for ten years or more, and that is the last thing you want.

About the Author

©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and HomeEquityHelp.net, a site devoted to information regarding home equity loans.

Charles Essmeier

car loan after bankruptcy

There are many credit card issuers out there promoting what some people refer to as "bankruptcy credit cards" - that is, credit cards for people who have a bankruptcy on their credit report. Of course, these credit card issuers target individuals with poor credit in general, not just those with bankruptcies - but for the purpose of this article, we will use the term "bankruptcy credit card". Most of the bankruptcy credit cards you see advertised are secured credit cards. If you are not familiar with a secured credit card, it's "secured" by a special savings account you establish with the issuing bank which acts as collateral for the line of
Click here to read more from this article ...

A 2nd mortgage loan after a bankruptcy is the easiest way to access cash. With online sub prime lenders, you can qualify for a mortgage as soon as your bankruptcy closes. But for near conventional rates, it is better to wait two years and build a solid credit history. Bankruptcy And Sub Prime Lenders Millions of people file for bankruptcy every year for many understandable reasons, such as job loss or illness. Sub prime lenders understand this and are willing to lend to such people Specializing in high risk loans with unconventional terms, sub prime lenders can work out financing for virtually anyone. Legitimate lenders will offer rates that are competitive
Click here to read more from this article ...