The current bankruptcy laws have become the source of malcontent for hard working people attempting to hold on to what they have, legislators who in hind-sight admit their zeal to incorporate changes has short changed the average person.
Further illustrating the vicious and punitive nature of the new bankruptcy law was the unwillingness of the House Judiciary Committee to hold hearings to pass relief bills for the victims of Hurricane Katrina. Ironically, the Justice Department did temporarily agree to waive for Hurricane Katrina victims the restrictive bankruptcy filing guidelines. The question was presented "How could the hurricane victims be remotely expected to produce documents that were clearly destroyed as a result of the hurricane"?
Most generally, accepted studies revealed the leading cause of bankruptcy filings were medical bills. Annually approximately 2 million people are facing medical expenses that will most likely lead to bankruptcy. Many of these families have been forced to go without proper medical care, or sacrifice some of the other necessities of life, like food or utilities to pay medical expenses.
Many have questioned the practicality of a federal bankruptcy code when only 15 states abide by it. The mountain of paper work, inadequate levels of protection for personal property, failed provisions for victims of natural disasters, and the total lack of compassion for military personnel indicated that the Bankruptcy Abuse and Consumer Protection Act of 2005 is a total failure. In fact it has often been referred to as the Creditor Protection Act.
Congress has already started engaging in talks to amend the current law. While there needs to be a measure of accountability for both debtors and creditors, a system must be equitable in order for it to be sustainable.
Our bankruptcy laws have changed a few times over the years:
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