Most people consider Chapter 7 bankruptcy when they consider filing for debt relief. This is because, under this type of bankruptcy, you are able to liquidate most or all of your debts and start over financially. However, the new rules disqualify millions of individuals from using Chapter 7. Instead, they must file Chapter 13 bankruptcy.
Under Chapter 13, your debts are not discharged. Instead, you and the court devise a financial plan to assist you in repaying your debts. Some of your debts may be reduced or restructured, but not completely eliminated.
Credit card corporations were one of the driving forces behind the statutory change. Under the previous plan, they believed that too many consumers charged enormous amounts on their credit cards and then filed for bankruptcy.
It was believed that by altering the law and compelling consumers to restructure their debts rather than discharge them, companies could recoup a financial windfall and generate billions of dollars in additional revenue. And it succeeded. At least during the past several years. The number of bankruptcies in the United States has continued to rise, despite the fact that credit card companies have begun to earn more money, in part because of legal changes.
The number of individuals filing for bankruptcy increased by nearly a quarter in the past year. And this year is on course for a similar increase in bankruptcies. This is primarily a result of the poor condition of the economy and the record number of foreclosures being compelled by banks.
In addition, the unemployment rate is reported to be just over nine percent. However, this number does not account for the millions of individuals who have either given up looking for work or are working part-time instead of full-time. Numerous economists estimate that the genuine unemployment rate is approximately 20%.
Homeowners are also in difficulty. In many markets, the longer individuals remain in their homes, the more equity they lose. It is estimated that twenty-five percent of all homeowners with mortgages currently owe more than their residences are worth.
In a true case of irony, while the changes that credit card companies pushed through made it more difficult for the average person to pay off his debts, they also caused his financial situation to worsen over time. And now, in many cases, their circumstances have become so dire that many consumers have no difficulty qualifying for Chapter 7 even with the new rules.""
" - https://www.affordablecebu.com/
