New Bankruptcy Law - What You Should Know?
Michalis 'BIG Mike' Kotzakolios
Kotzakoliou, SSA

With new bankruptcy filing out of control, there is now a new bankruptcy law in place. It used to be easy to file bankruptcy, before the new bankruptcy law was passed. This new bankruptcy law is called the Bankruptcy Abuse and Consumer Protection Act. Americans that are having a tough time with credit debt are now facing the new bankruptcy law.

This new bankruptcy law will give the credit card companies about $5 Billion to their bottom line. Bankruptcy is not an easy way out of debt responsibilities. Before the new bankruptcy law, filing bankruptcy was a pretty easy way to get out of your financial debt. Too many consumers maxed out their credit cards and took the easy way out. This new bankruptcy law makes filing bankruptcy much more difficult for consumers who really need debt relief. All of your debts are not erased with bankruptcy. Some consumers file a new bankruptcy thinking all of their financial responsibilities will be dismissed with a simple bankruptcy. You may still be responsible for alimony, student loans, taxes and other debts. There is not a guarantee your debts will be erased with a new bankruptcy filing.

Credit card banks lobbied with millions of dollars to get the new bankruptcy law passed. It took these credit card companies and banks about 10 years to get this new bankruptcy law passed. They say that the bankruptcy laws have been abused by wealthy people, who used fraud to take the creditors for a ride. These creditors think the majority of consumers could have repaid their debts without bankruptcy. This may be true in some cases, but not the majority of new bankruptcy cases. From 1994 to 2004 bankruptcy filings doubles, while the credit card bank industry profits tripled.

The credit card banks with their targeting of easy credit to consumers, is the cause of the massive filings of bankruptcy in the first place. This has now created more bankruptcy cases over the past 10 years than ever before.

With the medium income of $25,000 of bankruptcy filers, it's obvious that the rich are not abusing the bankruptcy law. Before filing a new bankruptcy, it's a good idea to look into all your alternatives. A bankruptcy can stay on your credit for up to a decade. The smartest thing you can do is to stop using credit all together. Take control of your financial situation and stop the hungry credit card banks from targeting you with easy credit. It may be easy to get credit, but in the end you can pay a high price with bankruptcy.