It is obvious that loan takers are not in the same position now. Have you studied the old personal bankruptcy laws? According to the old laws, the credit card company cannot do anything if you declare yourself bankrupt. In other words, it loses lot of money and it cannot do anything about it. Thus, personal bankruptcy is a biased option. It provides a lot of advantages to the loan takers and no benefits are produced for the loan giving companies. The government took notice of this problem and modified the laws so that bankruptcy could be changed to a neutral option.
Have the changes been beneficial for the overall economic condition?
Personal bankruptcy is never a beneficial option for the economy of every country. How can you expect that losing all the money can be advantageous for the economy in any manner? As loan takers, we do not worry about the economic factor. All we want is to get rid of our unsecured liabilities and nothing else. The American economy has faced a lot of problems because loan takers have declared bankruptcy to get out if recession. This is not the correct approach in any way. The following problems have been faced by the American economy due to the increasing bankruptcy rates.
1. Credit card companies are losing money as they cannot get anything from a bankrupt customer
2. If a customer who has to pay twenty thousand dollars to the bank and he declares personal bankruptcy, the bank loses twenty thousand dollars. This amount will be irrecoverable.
The American economy is already facing scarcity of resources. In this situation, a personal bankruptcy will not cause any improvement. Hence the government modified the bankruptcy laws. According to the new laws, it is not that easy to get bankrupt and extract a list of benefits. The main changes have been brought by the inclusion of chapter 13. According this chapter, you need to clear a minimum percentage of your dues even if you declare bankruptcy. Thus, you have to pay some money to the credit card company under all conditions. This removes the factor of biasness from the personal bankruptcy option.
If you are avoiding all the other relief options and considering getting bankrupt, you should consider all these new laws. Go online and study them. This will give you an idea about what you are gaining and losing.