Bankruptcy laws changed how people file for debt relief

Rules for bankruptcy that took effect years ago may have changed how consumers pursue that option as a way to find debt relief.

A recent story for Colorado's Vail Daily newspaper noted that as a result of the law changes, a "means test" was put in place for Chapter 7 bankruptcy. As a result, more consumers may be forced to file a Chapter 13 bankruptcy.

In a Chapter 13 plan, consumersare required to have debts repaid through a five-year plan. The new laws, which were enacted in 2005, require that people declaring bankruptcy get financial counseling. The purpose of the educational portion of the law is to help people manage their finances better in the future.

"Under the law, consumers must also take education classes about alternatives to bankruptcy, and before the process is complete, debtors also must complete a personal financial management course," the story from the news organization noted.

Kelly Robbennolt
801-787-6398
kellyrobbennolt@gmail.com