Bankruptcy cheats face Government crackdown
Written By Ellise Walsh
Tue 3/29/2005 11:04 AM
In case you have not heard the news, there is a new law on the books that
makes it harder to declare bankruptcy. This new law also makes it harder to
hide income and assets when declaring bankruptcy. Loopholes in the
bankruptcy law have allowed many people to cheat the system, and this new
law aims to crack down on the practice of sheltering assets while using
bankruptcy protection to avoid paying legitimate bills.
If you are in debt over your head and considering seeking bankruptcy
protection, it may be a good idea to get a copy of this new law and see how
it will affect you. If you are considering bankruptcy, it is absolutely
essential to consult with a qualified bankruptcy attorney. He or she will
have all the inside scoop on the new law, and he or she will be able to
advise you on what assets are protected and which are not.
If you are thinking of simply using bankruptcy to get out of the debts you
have run up from all those unnecessary shopping sprees, you may want to
think again. Bankruptcy cheats are facing a new Government crackdown, and
declaring bankruptcy may not provide you with the clean slate you think it
will. If your income is above the average for your state, you will need to
work out a reasonable repayment schedule and pay at least part of what you
owe your creditors.
There are of course many people who are forced into bankruptcy by
circumstances beyond their control, and the new Government bankruptcy law is
not aimed at these legitimate filers of bankruptcy protection. Many people
are forced into bankruptcy by unexpected medical bills, catastrophic damage
to property or the loss of a job and the inability to procure a new job with
comparable income level.
If you think you may be in trouble with your debts, it is important to sit
down with a credit counsellor before your debts are allowed to spiral out of
control. It is often possible to nip potential problems in the bud by
negotiating with creditors directly as well. Your creditors do not want you
to declare bankruptcy. They would much rather deal with you than with the
bankruptcy court. You may be able to negotiate more favourable terms and
conditions which help you avoid bankruptcy.
Of course bankruptcy still remains an option for consumers who find
themselves swimming in debt and unable to pay their bills. The new
bankruptcy law simply makes it harder for people to abuse the system to
avoid paying their debt.
