This is Financial Adviser, Patrick Munro,
discussing what are the new bankruptcy laws? Bankruptcy used to be a way for a creditor
to really, who was under duress could just literally go to the protection of the government
and keep their creditors at bay. Their debts would be forgiven, although their credit rating
would be ruined for usually a period of seven to ten years. What’s happened though, with
the economy being such a bad situation as it is, credit cards and banks in concert with
lawyers have gotten together and put together new laws which allow creditors to be pursued
even in bankruptcy for the repayment of the debts that they have. Any and all money over
any period of time going forward can be collected. In other words, the creditor may have fallen
on bad times and declared bankruptcy, but the banks, credit card companies, mortgage
companies, etc. can retain private collection agencies and pursue the creditor for as far
as possible into the future to garnish your wages, seize assets, if they can find out
where this individual lives, works or otherwise. This is regrettable course of action from
a consumer protection point of view, but banks and mortgage companies in concert with the
government carry a lot of power. This is Patrick Munro discussing the new bankruptcy laws.