Debtors exiting bankruptcy are often afraid of debt and the credit industry in general. Many post-bankruptcy debtors are gun shy about applying for credit because they are terrified that they will make mistakes which will land them in bankruptcy court again. On the other hand, it is absolutely essential that post-bankruptcy debtors jump back into the credit game because they need credit to rebuild their financial lives. And because there are so many laws designed to protect debtors, post-bankruptcy debtors really don't have a lot to fear.
Post Bankruptcy Protection Laws
Let's take a look at three laws that protect post-bankruptcy debtors:
Truth In Lending Act
The Truth In Lending Act protects debtors from unfair lending practices designed to trick them into getting into damaging credit arrangements. Under this law, post-bankruptcy debtors can feel confident that they will know the interest rate and "hidden" costs of any loan they receive. Just remember, it's up to the debtor to read these disclosures.
Fair Credit Billing Act
Worried about fraudulent spending on your credit card after bankruptcy? The Fair Credit Billing Act limits the debtor's responsibility for fraudulent charges to only $50. That means that if someone "hacked" or stole your credit card information and charge $1,000, you would only be responsible for paying no more than $50 of those charges and depending on the circumstances you might not pay anything.
The Credit Card Act
The Credit Card Act is the most recent law passed to protect debtors. Under this law post-bankruptcy debtors are protected from interest rate hikes on exiting balances as long as they continue to pay at least the minimum required and if the interest rate increases for new charges, they have 45 days to opt-out and close their account.
Have More Any Questions About the Bankruptcy Laws?
If you have anymore questions about the bankruptcy laws we will be happy to answer any of your questions. Feel free to set up a free consultation