The Law Creating More Debts

A relatively new law states that consumers who see no other way out of their debts that to file for bankruptcy will now have to pay higher fees for filing. This will make it even harder for people to get out for their often dire financial situations and it will take a lot longer for them to be able to financially start a new and financially healthy life. The law has been put into effect because apparently too many consumers abused the opportunity to file for bankruptcy to be able to clear debts and find cheaper solutions for their debts.

Consumer advocates and lawyers have criticized this new law fiercely. People who are already finding themselves in serious and dire financial situations now have less of chance to recover from their financial troubles. This kind of problematic situation is often caused not only by people not wanting to pay their bills or debts on time but can also be caused by external factors such as job loss, divorce or illness. Any situations in which people are simply not able to work or lead a normal life often endanger our financial situation.

Since the Bankruptcy Abuse Prevention and Consumer Protection Act was installed the number of bankruptcy filings has decreased. In Delaware only the number of filings for a so-called consumer chapter 7 arrangement has gone down with over 80%. This type of arrangement allows people to get rid of their debts by shedding debts such as medical bills and in some cases credit card debt.

Debt collectors and lending companies are happy with the results of this new law but it is a fact that consumers who do not file for bankruptcy in time to get rid of their personal loan debts often find themselves in a situation that is going from bad to worse which in the end only makes matters worse.