The consumer bankruptcy laws of this country were revised just 4 short years ago in a sweeping bit of reform legislation under the Bush administration. The laws were championed by the credit card companies and other creditors as a way of guaranteeing they would not be left holding the bag of people who get trapped under bills.

When the laws were written originally in the late 1970s, the rules reflected the concerns of the banks who were worried about losing money on mortgages. While both of these institutions are valuable assets to the country, they do not necessarily have the interests of the general consumer at heart when worrying about their balance sheets.

For this reason, the consumer bankruptcy laws should be revised. The idea that the consumer bankruptcy laws should reflect the needs and concerns of the consumers the laws are meant to protect and aid may seem extreme to some but it really isn’t that eccentric.

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Ever thought of how large corporations can file bankruptcy and still hold on to their assets? Faced with bankruptcy, you will see major layoffs happening and prices of their goods skyrocketing, while the company continues to operate and thrive in a matter of few years. One wonders how everything can happen. They are supposed to lose their shirts after declaring bankruptcy, yet they seemed to have lost nothing. It can happen with the help of Houston Texas bankruptcy lawyer. In truth, more and more corporations have taken this route and managed to put a stay on the foreclosure of properties and continue to operate as if business is normal.

New studies have opened new opportunities to this kind of thinking. Actually, this is an old practice that has suddenly resurfaced in the midst of the present economic slowdown. Instead of totally giving up on your assets to foreclosures, through the intervention of a Houston Texas bankruptcy attorney, one can file for chapter 13 bankruptcy. This legal action automatically stops any foreclosure proceeding but does not save you from paying up the back mortgage payments. One thing good about this setup is that you pay these back mortgage payments under your own terms. Although, all your proposals will have to go through the same process of approval by the mortgage lender, chapter 13 automatically imposes a deferral of action of your bankruptcy case. You can maintain this status quo for as long as you keep up on your part of the agreement and your mortgage lender can never repossess your properties. Your Houston Texas bankruptcy lawyer should be able to guide you safely through the entire procedure. This means that your properties are safe from foreclosure for as long as you are paying mortgage and the foreclosure is effectively put on hold.

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An individual who declares bankruptcy usually chooses one of two options. Chapter seven bankruptcy seeks to wipe out debts completely in exchange for liquidating your assets. Of course, most people declaring bankruptcy don’t have anything worth selling, and their house is probably protected by a homestead exemption in their state. The other major form of bankruptcy is chapter 13 bankruptcy which doesn’t try to take any of your assets but only offers a repayment plan.

To many people, bankruptcy seems like a pretty good deal which can provide the solution for a tough situation. However, it’s important to realize some of the drawbacks of bankruptcy. Most people know their credit will be severely damaged for the next several years, but they may not realize that some forms of debt are not usually discharged during bankruptcy.

If most of your bills come from credit card companies, for example, you should be able to eliminate these when filing for bankruptcy. Of course, that assumes that your case is successful, and you’ll have to prove to the court that you need bankruptcy based on your income and expenses. (This was made more tedious but still doable by the new bankruptcy reform.)

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