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What’s the Effect of the New Bankruptcy Laws?

The bankruptcy laws were changed in 2005 in an effort to curtail the number of people who file for bankruptcy as a way to release themselves from the responsibility of their debt. Many people and apparently the government as well thought that it was too easy to file for bankruptcy.

As a result, the process now involves more legal hurdles, time delays, increased paperwork and documentation, and mandatory credit counseling. In short it is no longer easy nor as quick of a process as it was before AND it still has the huge long term negative consequences on your credit worthiness and future financial flexibility.

Now more than ever, bankruptcy really should be a last resort only for the most desperate of situations. If you have any chance to solve your debt problem with debt settlement or debt management then you should explore those routes first.