Salt Lake City, Oct 2, 2005 / Press Release / Perfect Home Living seeks to address an important issue affecting many  Utahns.  Under the new bankruptcy law many of Utah's residents will find it more difficult to walk away from their debt. 

Utah, a state that ranks highest in the country for bankruptcy and foreclosure may not welcome the new law with open arms.   But for banks, mortgage lenders, credit unions and credit card companies the future looks bright or does it?

Although the new law goes into affect on October 17, many within Utah's legal world believe that the new bankruptcy law will force more of Utah families into filing Chapter 13 programs, thus ensuring that the debtor establish and adhere to a strict repayment program. 

But Perfect Home Living's Sheri Fitzpatrick believes that under the new law both creditor and debtor lose.  "The families that contact us because they are facing foreclosure are hard working families.  In most cases medical bills, divorce, death or company down-sizing has removed their ability to keep pace with their finances. "

In addition, she added, that creditors will have to now cover administrative fees stemming from long term collection costs, which in turn result in higher processing and application fees to consumers.  

Under the new bankruptcy law, if a troubled consumer offers to pay 60% of a debt and the creditor refuses to negotiate, that creditor will find it harder to collect if the consumer declares bankruptcy. 

According to Sheri Fitzpatrick, this aspect of the new bankruptcy law is a decisive victory for families facing foreclosure.  According to Sheri, a vast number of Utah's families choose bankruptcy only after learning of their mortgage lender's unwillingness to negotiate a short sale, even in instances where offers of 80% of the loaned valued is offered in the purchase price.

But she is quick to comment that this negotiating power can also be used by mortgage fraud criminals and that legislators must consider the reality of this happening.