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Saturday, February 7, 2009

Why bankruptcy?

Bankruptcy has been around for over four hundred years. However, what we assume to be bankruptcy, the elimination of debts, is not what bankruptcy started out as or was intended to become.

Bankruptcy has evolved into the complex process that it is now, but still new provisions should protect consumers more. Widespread changes in consumer bankruptcy law took effect on October 17, 2005, with passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Originally, in 1938, Congress overhauled the bankruptcy laws and created the Chapter 13 plan. Another major overhaul took place in 1978. One feature of the act was the hope that more people would use the Chapter 13 provisions and repay their creditors over a multi-year period. Congress did consider making Chapter 13 mandatory for all filers but later allowed it to be voluntary. In the end Congress simply weakened Chapter 13 protections and made Chapter 7, total discharge of debts, more attractive.

The latest changes to bankruptcy law may be making it harder for some people to file bankruptcy. And a few filers with higher incomes are no longer allowed to use Chapter 7 bankruptcy, but will instead have to repay at least some of their debt under Chapter 13. All debtors now have to get credit counseling before they can file a bankruptcy case -- and additional counseling on budgeting and debt management before their debts can be wiped out.

You need a law firm, capable of handling your case, no matter how complex it may be. We represent business and consumer alike, that are facing financial difficulties due to the economy. If you are facing foreclosure, repossession, or other embarrassing financial misfortune, bankruptcy can be for you.

The Baez Law Firm, P.C. is a general practice law firm that is ready to help you during difficult times. We handle bankruptcy, criminal law, personal injury, family law, business law, consumer law, litigation, and appeals.

1 comment:

  1. Filing bankruptcy is often the last financial resort that offers debtors a way out of financial turmoil. Bankruptcy laws have been changed many times over the years and recently the new bankruptcy laws have made it harder for people to seek bankruptcy protection.