Bankruptcy & Credit Cards Marketing
The 2005 bankruptcy reform brought a lot of changes to the lending industry. If you can go back in time that is some years before the enactment of the 2005 bankruptcy reform bill, you will find that many people would take advantage of the bankruptcy bill to file for bankruptcy. There are two main chapters that cater for the same that is chapter 7 and chapter 13. It is true that many people, more than 72%, who filed for bankruptcy would do it under chapter 7 of the bankruptcy bill.
Chapter seven simply allows one to file for bankruptcy and hence the state liquidates the assets that you owe to cover your debts. Many people preferred this means because they would simply file for bankruptcy and once what they own is liquidated and they are declared bankrupt, then all the remaining debts are scrapped off.
The other way to call for bankruptcy is under chapter 13 where if you file for bankruptcy then you are put on a repayment program. The state runs your affairs and clearly differentiates what you need, that is the money that you need for your basic activities to pay rent, food, school fees and so on. The remaining money is secured as money to repay your debts (credit card companies are happy with this).
It is evident that the 2005 bankruptcy reform puts more emphasis on the use of chapter 13 where you are allowed to pay off debt following the repayment program. In fact, it is now mandatory for consumers who want to file for bankruptcy to go through a government approved credit counseling program where you are assessed whether you can be able to pay your debts using the repayment program or not. Remember that you pay for the sessions that you attend.
Such a program has seen many consumers pay off debt that they own the credit companies. This has actually made the credit card companies to feel more secure and hence they have improved their marketing strategies. It is very true that some of the companies are even using predatory means by giving their cards to people who even have no idea of the consequences that come with the card. It is true that you will see these companies every fall giving away credit cards to new students at the colleges and universities well knowing that they will get their money back and even at a higher interest rate, thanks to the bankruptcy reform bill of 2005.