Originally Posted by geminicricket
Hello seeemilywrite. I read earlier today that the recent change in the bankruptcy law allowed a court trustee to supervise the payment of debt holders from the assets and income of a bankrupt person.
In the good old days, a gainfully employed adult could max out a bunch of credit cards and use bankruptcy to eliminate all that debt without paying for it. This put a burden on credit card companies, so they charged 18% to everyone who paid their debts in a timely fashion. So, the credit card companies purchased new laws in 2005 which removed from bankruptcy law the ability for debtors to use bankruptcy law to eliminate debt without paying for it. Now, the law establishes that a court trustee will supervise the debtor in repaying the lenders. That is to say, if you buy you will pay. Bankruptcy may let you pay slowly, but you will pay. Oh, and the credit card companies still charge 18% to everyone who pays their debts in a timely fashion.
You still only have to pay the principal though, and not the interest. So it's still beneficial for those in financial crisis. And...it's only a percentage. I think it goes up to 10% of your total debt, but it could be as much as 15%. Still, it's a good deal for those who really need it...and, with the new law, you have to really need it. The trustee watches your income and if it increases, so do your payments.
Bankrupcy Law
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