Bankruptcy laws are state specific but definitely not without federal reference. Of late, they are tightened to raise minimum credit card debt payments, as a first step. Personal bankruptcy laws have certain requirements for the debtor too, as most of these are taken from federal laws, title 11 of the United States Code. However, the primary goal of the bankruptcy laws is to provide debtors an opportunity to start afresh.
All major changes to bankruptcy laws are in place already. So what can you expect? They are specifically targeted at preventing abuse of it; and try to limit the homestead exemptions. Most of the changes are technical and procedural in nature making them tougher. The new changes are reflections of law makers’ concern to a country with millions in debt beyond their ability to payback.
From the perspective of an ordinary citizen, bankruptcy laws can be taken as part of a safety net enjoyed in America. Because, they ultimately provide you relief from debts and save you from sliding further into crisis. If you, the debtor, are honest, take it for granted that the new bankruptcy laws are intended to provide you with a fresh start to get free from old obligations and debts. But simultaneously, if you are out to take advantage of the changed bankruptcy laws, you will be eliminated ruthlessly. What point this drives home is that- bankruptcy certainly helps you out of financial mess but it simply is not charity. They are in place to provide you and your business an opportunity to pull-up your socks and discharge the debt before getting a fresh start.
What is chapter 7 bankruptcy? Most of it deals with consumer bankruptcy, concentrating on the liquidation process under the federal bankruptcy laws. So what is this Chapter 7 Bankruptcy? Chapter 7 cases are no asset involved cases, and debts are eliminated without a need for repayment. But the new changes to bankruptcy law don’t let debtors file Chapter 7 bankruptcy easily making it harder to qualify for Chapter 7 debt relief. You are required to meet what is known as ‘means test’ to provide for qualification under federal bankruptcy laws. On the other side, some commentators feel that Chapter 7 ruins credit card companies.