Why Bankruptcy Laws Changed?
Many bankruptcy laws changed in 2005. This was through the Bankruptcy Abuse Prevention and Consumer Protection Act. The changes that were created through this legislation include the Means Test to establish eligibility for consumer Chapter 7 cases. Without going into specifics, this Means Test creates a presumption of abuse of the Bankruptcy Code for those individuals and families whose income is over the median income in their respective states. Other changes include lower values for "luxury" credit purchases and cash advances that are not dischargeable in bankruptcy. Also, consumer debtors are now required to attend credit counseling before and during bankruptcy.
If you have further questions on these changes, contact the Henshaw Law Office at (408) 599-1305 today.
Certain questions were raised when the bankruptcy laws were changed. The main question was, why and for what reason did the laws change? Well, they changed because there was a requirement for them to be changed. The requirements were created by the massive bankruptcy filings which were making the economy hollow from inside. The already struggling recession hit economy was once again hit by the chaos caused by bankruptcy and none of the economic units were spared from flames and fumes. As the economic meltdown started, thousands and millions of people lost their jobs and they failed to repay their credit card bills and other unsecured loans. It is because of this, they faced serious debt problems. They wanted to get out of all their liabilities once and for all and the only method to do so was to file for bankruptcy. Bankruptcy eliminated 100% of the outstanding that the consumers had and this was what the consumers wanted. The sad factor was that they also suffered of other financial t
