As valid for loans, credit cards, and other credit forms are easier to obtain, as well as the level of bankruptcy in the United States. In a ten-year period, between 1994 and 2004, the rates of bankruptcy in the United States almost doubled. The government’s reaction is to take a closer look at the reasons for parties that submit bankruptcy, new laws are exiled to ensure that individuals and business have legitimate reasons to submit bankruptcy.
One of the main laws regarding the bankruptcy skipped in the United States in 2004 was a law of prevention of bankruptcy abuse and consumer protection. This new law applies in October 2005, but has caused an uproar in the financial law and bankruptcy arena. In addition to making it more difficult to qualify for Chapter 7 bankruptcy, or full bankruptcy, the law imposes more stringent rules and budgets in Chapter 13 Debtors.
The major changes in laws made throughout the United States are the need for debtors to file a tax refund for four consecutive years before qualifying for bankruptcy. In addition, debt that cannot be removed, or debt where personal obligations are taken by the court system, it is more difficult to obtain. This law requires that the debtor prove good reasons for debt that cannot be done and even need more debtors to be responsible for the debt budget that cannot be incurred.
As far as two types of bankruptcy laws, Chapter 13 bankruptcy is what allows debtors to keep some assets after proving limited debt and fixed income. This bankruptcy is very good for debtors who get themselves into major financial difficulties but still have a way to pay some assets. The court will prepare a payment and budget schedule that allows full mortgage or car payments within three to five years.
If payment is completely not an option, the bankruptcy law requires that the debtor will submit a bankruptcy of Article 7. It is often referred to as the liquidation of complete assets, except for excluded items. The item excluded in bankruptcy hearing is determined by the court and is usually an item that is a necessity, such as cars or goods related to work. In addition, the court will distribute debt into two categories: debt that cannot be removed and issued.
Debt that cannot be removed also falls into two categories: non-monsters because of the wrong behavior in debtors and cannot be issued due to public policy. The wrong error by the debtor can mean theft or money laundering while public policy can include payment of child benefits or assessments related to the court.
Keep in mind that in one type of bankruptcy, an individual is almost always required to keep paying taxes, student loans, benefits, child support or costs related to the court. This is a place where many parties that go bankrupt are misled in the bankruptcy of article 7, because they are often referred to as “new beginning”. While the court can arrange a payment plan to help debtors to pay public policy debt, even Chapter 7 Debtors will still be asked to make payments.
Another major point for bankruptcy law is that bankruptcy will remain on credit reports for approximately ten years. This will make it very difficult to qualify for all types of credit, even credit cards, but especially for car loans or mortgages home. While some creditors will still offer limited credit to bankrupt individuals, interest rates and financial costs usually through the roof. This makes it more difficult for debtors to stand up again.
Finally, it is no less important, keep in mind that the law of bankruptcy will require co-signers to be responsible for debt payments. If your mother or father signed a car loan when you were young and you still owe it to the car, they are responsible for payment. Friends or family members you have helped be taken to the bankruptcy court process, which can make tension in friendship and family
