New Bankruptcy Legislation May Make it Harder to Find an Attorney Written by Charles Essmeier The recently passed Bankruptcy Abuse prevention and Consumer Protection Act will make it harder for people with problem debt to have their debt eliminated through filing for bankruptcy. This new legislation will make it harder to have debts wiped out by courts, and will require more debtors to pay back some or all of their debts. Considered by many to be a gift from Congress to major credit card companies, this new law has many people rightly concerned about how to best deal with their debt problems. An additional concern that few have considered is that it not only will be more difficult to file for bankruptcy, it may also be difficult to find legal assistance once new law takes effect in October, 2005. Under current law, filing for Chapter 7 bankruptcy for consumer debt is a fairly routine procedure. A Chapter 7 filing allows most debts to be eliminated once debtor demonstrates that they cannot pay their bills. While it is and should be considered a last resort for those in debt, a Chapter 7 filing allows those who emerge from bankruptcy to have a “fresh start.” Legal costs vary for assisting with a Chapter 7 filing, but they typically involve only a few hours of billing time on part of an attorney. Interest-only Mortgages Have Their Pitfalls Written by Charles Essmeier Rising home prices, particularly on East and West coasts have put costs of home ownership seemingly beyond reach of many. And yet, home ownership is up nationwide, and percentage of Americans who own their homes is highest it has ever been. How is this possible? There are more different types of mortgages available to home buyers than ever before, and one that is growing in popularity is interest-only mortgage. With an interest-only mortgage, buyer pays no principal for first few years of payments. The period of time varies, and is typically anywhere from one to five years. At that time, principal is added to mortgage payments and amount of payment increases. By keeping payments lower for first few years of mortgage, interest-only mortgage allows buyers to obtain a more expensive home than they otherwise might. The buyer’s income will probably increase over time, making it possible to afford higher payments that will come when principal is finally added to payments. The downside to an interest-only mortgage is that no equity accrues in home if buyer isn’t paying any principal. For many Americans, equity in their home is their single largest financial asset, so taking out a mortgage Cont'd on page 2 ==>   ImproveHomeLife.com © 2005 Terms of Use