Everyone knows that filing bankruptcy can be a breaking point for his career. His financial life will be ruined. Despite all this information, millions of people file bankruptcy petitions each year. According to the stats provided by the U.S court, almost 1,412,870 non-business bankruptcy filings were recorded in 2009. In 2010, this number increased by 14%. The Government of United States is trying to handle the situation. It cannot offer a debt relief offer to all the debtors and creditors. Government has made new debt settlement laws with the help of Federal Trade Commission. Now, these laws can be helpful in changing the trend of mounting bankruptcy filings.
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Behind the scene, why debt relief filings reduced in the past few years? Answer to this question is the bad performance of debt settlement companies. New debt settlement laws have made appropriate changes in the previous laws. Main objective that is achieved through these new laws is banning of upfront fees of settlement companies. Now these companies will take their service charges after providing settlement deals to their clients. Due to these laws, number of complaints has reduced to significant level. Although, the Federal Trade Commission is still not satisfied with the current performance of settlement companies yet debt settlement cases have started to increase. There are still many companies that are charging thousands of dollars from their clients as upfront fees. So a customer should try to avoid these companies because according to new debt settlement laws, this practice is illegal.
At the same time, filing bankruptcy is made much more difficult in the new debt settlement laws. Its fees and other charges have been increased. Similarly, the court has increased responsibility of bankruptcy lawyers. So if they will provide incorrect information, the court will take severe action against them. For this reason, they have also increased their fees. A test is conducted for all the applicants. After the test, eligibility of a person for filing bankruptcy application is evaluated. Government wants people to settle their debts instead of filing bankruptcy. This will not only save their money but also future life and career.
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