In 2005 and following a lengthy process of lobbying by credit card companies, Congress passed a new bankruptcy law, which many have complained is not in the interest of consumers and is overly complicated. But however you feel about the new bankruptcy law, you have to abide by it and it looks, for now, like it is here to stay.
But what does the new bankruptcy law actually mean and aim to achieve? Well, essentially, this particular new bankruptcy law was designed to prevent those who do not need to file from doing so. It makes it tougher for people to declare bankruptcy and ensures that those who do should only have to do it once! It does this by enforcing financial counselling prior to bankruptcy and also financial management classes following. Perhaps the biggest change brought about by the new bankruptcy law was the introduction of a means test, which means a detailed inspection of your income and expenses before you can file.
Some people have argued that this makes bankruptcy all but entirely unavailable. This, however, is not the case. While there is no denying that there are now more obstacles in the way, for most of those who were eligible before 2005, eligibility is still present!
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