New bankruptcy law vs. old bankruptcy law
The financial institutions were never in favor of the previous bankruptcy law because they were unable to recover anything from a chapter 7 bankruptcy filer. If the debtor qualified under chapter 13 of the bankruptcy code, they were still required to wait the allotted time to recover a portion of their debt. The creditors favored settlement over bankruptcy. A bankruptcy can remain on a person's credit report for up to ten years, which is a very lengthy time frame. Inasmuch as an increasing number of individuals will be compelled to file for bankruptcy under chapter 13, creditors will be able to recoup at least a portion of their lending thanks to the new legislation.
Debt settlement discussions will proceed.
Even with the new bankruptcy law, creditors and debtors still prefer the settlement option. Debt settlements lower the credit score of the debtor, but this is preferable to bankruptcy, which remains on their credit report for a lengthier period of time. One might believe that the new bankruptcy law will make creditors less amenable to settlements. In contrast, there would be no significant impact on the financial settlements negotiations. There are numerous causes for this. According to the new law, if a person is eligible for chapter 7, creditors receive nothing. Even if he qualifies for chapter 13, creditors must wait 5 years to recover 30 to 50 percent of his debt. If they can recover the same sum in a shorter period of time through debt settlement, they would naturally choose that option.""
" - https://www.affordablecebu.com/