Changes to the law in the form of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, are due to complaints by the banks and other financial institutions who cite abuse of the bankruptcy laws by financially irresponsible consumers.

Worries, however, abound that the New Bankruptcy Law will leave the most vulnerable in society - namely, the elderly, low income families and single mothers - with no protection against unmanageable debts due to job loss or other unforeseen circumstances.

Changes to the law in the form of the new bankruptcy laws of 2005 are as follows:

1. To escape the new law, your income must be below the median of income for families of the same size in the state where you live

2. You will be required to undertake a means test (based on income and expense) to ascertain whether or not you qualify for "debt forgiveness" (provided currently under Chapter 7 Bankruptcy)

3. If the bankruptcy court believes you have enough spare income each month to set aside for repayment of debts, you may be required to file Chapter 13 Bankruptcy, which will mean automatic participation in a debt repayment plan over 3-5 years

4. Under the new bankruptcy law, you'll be required to undertake debt counseling under Section 106

Under Chapter 7 bankruptcy, you are allowed to protect part of the equity of your home from creditors, as determined by the state laws where you reside. From the date of the changes, however, the new bankruptcy law overrules some of these exemptions. Subject to filing time limits, the exemption for your home is limited to $125,000.

The new bankruptcy laws of 2005 also affects businesses who file for bankruptcy.
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Debt Stacking - How To Get Out Of Debt Fast! Did you know that HOW you pay your debts can dramatically affect how quickly you reduce debt - even if you make the same payment each and every month? Copyright © 2005 Andy Ballentine and 1st-Netcard.com. All Rights Reserved. Please note: This Resource Box MUST be included with article.

A Quick Note From The Publisher... If you like the article above, you may be interested in the following article which is also related to Bankruptcy... Car Loans After Bankruptcy - Financing Auto Loans With High Risk Lenders Bouncing back after bankruptcy is easier than most people think. The key to rebuilding credit involves re-establishing a good payment history with new creditors. To do this, you must apply for new accounts. Getting approved for new lines of credit following a bankruptcy is challenging. Fortunately, many lenders offer programs that allow a fresh beginning after bankruptcy. If you are hoping to boost your credit rating, consider getting approved for an auto loan. Benefits of Getting an Auto Loan after Bankruptcy If you do not begin establishing a good credit history after bankruptcy, your credit score will not improve. If filing bankruptcy, it is wise to educate yourself on ways to quickly boost credit rating. One such tactic includes financing an automobile. Most auto loan lenders offer loans to people with bad credit. Cars and other types of vehicles are collateral-based loans. Hence, if you do not repay the money, the lender may reclaim their property. Disadvantage of...

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