New Bill May Make Filing for Bankruptcy More Difficult

A new bill up for a vote this week in the Senate could make it more difficult to file for bankruptcy and could give creditors more recourse in some cases.

At this time most consumers file for bankruptcy under Chapter 7 or Chapter 13. The former allows you to liquidate your assets (minus those items exempted by your state) in order to pay back your creditors while cancelling the rest of your debts. Back in 2004 alone 1.1 million people filed for this type of bankruptcy, which amounted to 72 percent of non-business bankruptcies.

Those individuals who choose Chapter 13 bankruptcy will be asked to develop a repayment plan where you are expected to pay back your debts within three to five years. As Chapter 7 bankruptcy allows you to get a "fresh start" most people try to file under this type. However, if the new bill is enacted then more people would be forced to file for Chapter 13 bankruptcy. This is meant to deter those people who are using Chapter 7 bankruptcy to eliminate debts that they could feasibly pay, but don't want to.

If you have questions about the new bankruptcy bill, contact us to receive answers from a Chicago bankruptcy lawyer.