The rules are changing when it comes to filing for Chapter 7 bankruptcy
Monday, March 14th 2005, 9:42 am
By: News On 6
The US Senate stiffens up regulations on who can file for bankruptcy and relieves some of the pressure on companies who have to pick up the bill.
Before now, many Americans in debt have used Chapter 7 bankruptcy to 'start over' financially. But US Senate leaders say, too often that system is abused by impulsive shoppers, gamblers, and deadbeat dads avoiding child support payments. Opponents of the new legislation say it'll make bankruptcy too difficult for the people it was meant for.
News on 6 anchor Scott Thompson says bankruptcy filings in Oklahoma have never been more common.
Over 15,000 people applied for bankruptcy protection in Oklahoma in the last two years. In the past, Chapter 7 bankruptcy has wiped away mountains of debt for big spenders, making it almost impossible for banks, retailers, and credit card companies to recoup their losses.
Margo Mitchell is the president of Consumer Credit Counseling Service, a non-profit organization that helps people deal with their debt instead of turning to bankruptcy. "We've had people call and say, 'they're going to foreclose on my house tomorrow!' Well, it's a little too late, whereas if they had called us 90 days ago, we may have been able to help the situation. But I think people are very embarrassed, so they wait until it's a crisis."
Some of Mitchell's alternatives to bankruptcy may be the only roads out of debt for folks affected by this new law.