Amendments To The New Bankruptcy Law

There are several amendments to the law governing bankruptcy. For one to decide wisely on bankruptcy matters, he must have a good grasp of the vital amendments the new bankruptcy law covers.

1) Compulsory credit counseling - Those who file under the revised bankruptcy law, are now required to go through credit counseling with government certified credit advisers. It's hoped that this amendment will enable people to consider the gravity of the declaring bankruptcy. Most individuals frequently choose this without thoroughly seeking other options or weighing its outcome. This compulsory credit counseling is expected to lower the number of persons declaring bankruptcy, so individual credit scores will hopefully improve.

2) Test of financial capacity - This bankruptcy law revision will hopefully deter people from filing for bankruptcy just to get rid of their debts. Implementation of this test will enable the government to check out bankruptcy petitioners under Chapter 7 who only want to have their debts cleared. People will then need to seek ways of dealing responsibly with their liabilities. This amendment is generally an effective economic reform.

3) Additional filing under Chapter 13 - Many bankruptcy claims are now filed under this chapter of the new bankruptcy law since sterner regulations are being implemented for the Chapter 7 filing. Under this chapter, individuals are allowed flexibility in paying their debts off in amounts and terms they can afford. This teaches people to give serious consideration of their debts.

4) Lesser protections- Before, people filing for bankruptcy are immediately immune from their creditors' hold. In the revised bankruptcy law however, debtors are not rendered completely protected from people who demand for their eviction, suspension of driver's license, or divorce filing. This deters those who only take advantage of the protection granted by the court for their own interests. Hence, debtors and lenders alike are justly and lawfully treated.

5) Child support and alimony are prioritized - Unlike before, under the revised bankruptcy law, family members are given priority over creditors. Thus, the debtor's family is now allowed to benefit from the assets first before the creditors can put their claim on it. Those who really need the debtor's money shall primarily obtain it then.

6) Compulsory financial handling lectures - Under the revised bankruptcy law, petitioners are obliged to join several workshops and seminars about proper management of their finances after the case proceedings. The end of the bankruptcy may be viewed by many as a stepping stone to rise again, only quite a few are actually armed and capable of doing so. By implementing these seminars, the new bankruptcy law ensures that people are enabled to avoid committing similar mistakes that led to their bankruptcy. By educating people on how to handle their finances properly, their chances at starting anew are greatly improved.

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msnbc.com

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