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Senate Bill 256 passed on March 10, 2005 and was signed by the President as the
Bunkruptcy Abuse Prevention and Consumer Protection Act on April 20, 2005. The new law became effective
October 17, 2005 and completely changed the rules. The purpose of this bill is to frighten debtors away from bankruptcy and
to introduce substantial burdens and traps if Americans do indeed choose to seek debt relief through Federal law.
The credit card lobbyists spent over one hundred million dollars to seduce lawmakers to hurt consumers.
Our goal is to evaluate whether the new bankruptcy laws can still be used for your good and, if not, to discover other avenues
to reduce your debt. If bankruptcy is selected, we intend to walk clients successfully through the new federal hurdles. At
every stage there are traps that allow the court to automatically dismiss your case without giving you a chance for a hearing.
Even years later, the Government can audit your bankruptcy, your expenses, your income, and life-style.
In a sense there are two groups of debtors in bankruptcy: those whose income falls below the median ($42,000 a year for a
single person, $53,000 for a couple) and those whose income falls above the median. If your income is above the median, there
is a strong likelihood that you must devote all income over basic living expenses to pay credit cards and other bills for
five years.
Unfortunately, the new bill did not address the exorbitant interest rates that banks charge consumers. The new law did
not address the predatory practices of paycheck advance lenders. The new law did not address the fraudulent and misleading
techniques that credit card companies use to ensnare Americans to borrow ever more money.
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