Why Filing a Bankruptcy is No Longer a Smart Option:

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, providing for significant changes in Bankruptcy in the United States, was passed by the 109th United States Congress on April 14 and signed into law by President George W. Bush on April 20, 2005. The Act of Congress attempts to make it more difficult for consumers to erase debt by filing a bankruptcy.
Some of the more significant (and controversial) changes introduced to bankruptcy doctrine include:

• Increasing the amount of paperwork which must be filed by every debtor, required pre-filing Credit Management Program and post-filing financial education for debtors whose debts are primarily consumer debts, increased filing fees, and increasing attorney obligations in a manner that, collectively, will increase the cost of filing for bankruptcy.
  
  What this means:
  The courts want to see that anyone filing a bankruptcy must have enrolled in a credit management program (like our debt reduction program) and made an attempt to pay their debts off on their own before they can even become eligible to file a bankruptcy. Also, the costs for filing a bankruptcy will increase.


• Make it more difficult for individuals to receive a Chapter 7 discharge, a means test is to be imposed on would-be filers to test if an applicant has enough disposable income to pay off consumer debts on their own.
  
  What this means:
  If you are not under the poverty level and the means test finds that you can afford to pay back your creditors, the likelihood of being eligible to file a bankruptcy is small.


• Allowing creditors to pursue collection remedies without court permission in various circumstances such as offsetting tax refunds, pursuing tax and domestic relations litigation in all respects except the final turnover of assets from the estate, establishing wage assignments in domestic relations actions, repossessing vehicles and personal property subject to loans or leases 45 days after the first meeting of creditors in cases where no court action has been taken regarding that property, and allowing evictions that completed the court process prior to the filing of the petition or involve endangerment to property or drug use to proceed.
  
  What this means:
  If your creditors can find a legal method of collecting debt like garnishing your wages or repossession, the courts can allow them to do such.

The legislation, introduced by the chairman of the Finance Committee, Senator Chuck Grassley of Iowa, was supported by President George W. Bush. Republicans & Democrats alike have noted that the credit card industry spent millions of dollars lobbying in support of the act. Opponents of the bill argued that it makes the government a bill collector for private companies that make monetary reward off the distress they impose on their very own consumers. The credit card companies want you to pay those high interest debts for the rest of your life and they are willing to spend millions to make sure once the trap has been sprung there is no way to get out.

There is a way out - let our Debt Reduction Program help set you and your family free from this never-ending cycle!