New Bankruptcy Laws

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The crushing burden of America's debt made itself known this week in the lines at bankruptcy court and on the desks of debt relief attorneys.

"I noticed it," laughs Delta Township lawyer Greg Smith. "I haven't had time to get a haircut this week."

His clinic, Debt Relief Legal Clinic, handled every case they could and even had to turn some away.

The new laws' make no bones about their intention: They make bankruptcy more difficult to discourage the practice among everyday americans. For Chapter 7 filers, it means more fees and meetings

"They've increased the filing fee by $75," Smith says. " They require that you have contact with a credit counselor."

The list goes on. The new law also means new guidelines, forcing people in higher income brackets to use Chapter 13 bankruptcy, dragging out payback over a number of years

"If you had your choice of getting out of debt now, or getting out of debt 3 years from now, or 5 years from now, most people would choose now," Smith explains, of the difference between the two.

In truth, Smith says, most people who can afford to jump through the hoops of Chapter 7 will still be able to use it. In fact, he says, his busy week is spilling into next. As for discouraging bankruptcy, he says, "I think the affect will be the opposite. I think it's actually educated people about unmanageable debt."