Bankruptcy filings up sharply in advance of rule changes - WMC Action News 5 - Memphis, Tennessee

Bankruptcy filings up sharply in advance of rule changes

LITTLE ROCK (AP) - People with financial problems in Arkansas and across the nation are rushing to file for bankruptcy before new, more strict federal laws take effect on Monday.

The new laws will stop many consumers from discharging their debts.

In Arkansas, 83-hundred-49 bankruptcy petitions were filed from July to September. The first ten days of October brought 23-hundred-95 filings. So far this year, filings are up 78 percent from a year before, with 24-thousand-98 petitions filed.

After Monday, people with above-average income will be barred from filing for Chapter Seven protection, where debts may be wiped out entirely. Instead, they will have to file more restrictive Chapter 13 personal bankruptcies. Chapter 13 will require a five-year repayment plan. There will be some leeway for hurricane victims and members of the military.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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