New Bankruptcy Laws

On July 8th, 2008, new bankruptcy laws emerged. The first new bankruptcy law, is that student loans will now be discharged after 7 years instead of 10. If you have been out of school for more than 7 years, your student loans will be discharged instead of the previous 10 year rule.

The second of the new bankruptcy laws is that you can now keep your RRSP's with the exception of any contributions you have made in the first year before declaring bankruptcy.

The new bankruptcy laws of 2005, which is referred to as the Bankruptcy abuse prevention and consumer protection act of 2005, was designed in order to help people get out of debt. Now debtors must seek credit counseling BEFORE filing for bankruptcy and they must get other debt counseling before their debts can be discharged.

You must receive credit counseling with a company that is approved by the U.S trustees office. At the end of the bankruptcy process, you are required to undergo another counseling session, with the aim of financial management. You will then have to submit proof to court that you underwent this step so that you can get a bankruptcy discharge.

These new bankruptcy laws state that some people may not be allowed to file bankruptcy chapter 7 if their incomes are too high. They will instead be required to pay some of their debts through chapter 13. Under the old laws, you had the option of choosing which bankruptcy type to file under, with chapter 7 being the most popular.