What you need to know about the new bankruptcy law

Jet, Sept 12, 2005 by Margena A. Christian

Changes the new law brings could be devastating for debt-ridden people who might be unemployed, ill, or injured.

However, Reed explains, "Congress determined that people who could pay more through a voluntary repayment plan to their creditors were not making the effort, but instead simply going into Chapter 7, taking advantage of what some perceived as overly generous exemptions and walking away.

"In addition, it was felt that even those who availed themselves of Chapter 13, that there was abuse because people were not paying enough to their creditors."

Reed concludes "many people appear to have decided to take advantage of what appears to be more consumer-friendly provisions of the current law before the new law goes into effect."