Easy Home Loans

On October 17, 2005, congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act which made it more difficult for consumers to file personal bankruptcy. This was done in response to growing concerns about bankruptcy fraud and also to encourage consumers to seek other alternatives before resorting to bankruptcy.

Unfortunately, this has opened the gates for creditors to market more aggressively to consumers, knowing they will have greater difficulty discharging their debt if they take on too great of a debt burden. Since the bankruptcy law has primarily benefited creditors, some have taken it as a reason to lower their approval standards with the knowledge that they have more resources available to pursue collection in case of a default.

Among other things, passage of the 2005 law required consumers who file for bankruptcy to first complete a consumer credit counseling program at any point during the six months preceding the filing. Consumers need to be very clear that bankruptcy is not the best option to pay off debt . At the budgeting session, a credit counselor will evaluate the debts of the person who is wishing to file for bankruptcy to determine if that is actually their best option. This session is required to last at least 90 minutes under the bankruptcy reform law.

If the credit counselor feels the consumer would be better served by drafting and maintaining a budget, he or she will make that recommendation to the bankruptcy court. As the debtor, you are not required to abide by the recommendation of the credit counselor, although you will be required to show proof of completion of the credit counseling session to the bankruptcy judge.

You also have the option of enrolling in a debt management plan rather than continuing with filing for bankruptcy. The credit counseling agency where you completed your required course most likely offers debt management programs, and if they do not, they can refer you to one Home loan company in South Africa. In this type of program, you make one monthly payment to the agency who disperses it to your creditors based upon the amount they agreed to in the negotiation process.