An article in Business Week claims that that bankruptcy laws have backfired on mortgage companies because the new laws make it so much harder to file causing many people to allow their homes to fall into foreclosed before attempting to file bankruptcy. This article is only partly right. Yes, filing bankruptcy takes a lot more work since the new bankruptcy laws were passed in 2005. But filing Chapter 13 can still stop a foreclosure in its tracks. Despite the hurdles put in place by stricter bankruptcy laws, I have helped thousands of families stop foreclosure and keep their homes by creating a 5 year repayment plan debtors can afford. The new bankruptcy law may not have the same strength it had prior to the law but it still packs quite a punch.
- If you meet the income requirements of the new bankruptcy law you can still discharge credit card, medical bills and other unsecured debt under Chapter 7 and possibly save your home from foreclosure.
- Filing Chapter 13 still stops foreclosure, judgments and wage garnishments while you setup a court approved repayment plan.
Don't allow the changes in bankruptcy law to stop you from taking actions today that can prevent your financial picture from getting worse.