New Bankruptcy Laws to Begin October 17

More stringent requirements to declare bankruptcy go into effect starting October 17, 2005. Passed by Congress and the House in the Spring of 2005, these new laws, supported by the credit card industry, will make it more difficult for people to file for bankruptcy, and require stricter repayment plans for those who file.

The credit card industry cites the rising number of bankruptcies as a reason that more strict laws are needed. Opponents of the law say the reason for the higher defaults is the credit card industry practice of extending ever easier credit. In fact, credit card industry profits risen some 300% between 1995 and 2005.

Some lawmakers have proposed pushing back the start date for the new laws to accomodate victims of the recent hurricanes, but according to the New York Times, Rep. F. James Sensenbrenner Jr., R-Wis., the chairman of the House Judiciary Committee, indicated that the new law aleady contains provisions for lower income individuals and families.

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