Bankruptcy Two Years Later – Creditors Still Not Happy

18 Oct Bankruptcy Two Years Later – Creditors Still Not Happy

The Credit Industry is unhappy about the way their revisions to the Bankruptcy Code are working out. It is now two years since the Bankruptcy Code was amended with myriad changes to satisfy the hunger of the creditors who claimed that they were not making enough money and were suffering millions of dollars of losses to bankruptcy. So after years of pressuring Congress they got what they wanted – or did they?

In a recent article in the The Clarion-Ledger from Jackson, Mississippi, reporters showcased the displeasure of the credit industry in the way the “new” bankruptcy law is working out. It turns out that creditors are getting less than they anticipated and the changes might even be responsible for the large increase in foreclosures as consumers forego trying to save their homes. The law also gives preferential treatment to car lenders who can now insist on full payment for any vehicle purchased within the 910 days prior to filing for bankruptcy.

The article does get some things wrong, however. It states that you may only file for Chapter 7 Bankruptcy every seven years. In reality, to get a discharge under Chapter 7, the filings must be eight years apart. But you may file for Chapter 13 within that time and enter into a payment plan to pay some money to creditors. As before Chapter 7 or Chapter 13 will successfully stop a foreclosure or repossession, if you file before it is too late.

“ConnecticutGene Melchionne is a bankruptcy lawyer covering the entire State of Connecticut. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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