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| What are the recent changes if in bankruptcy law? |
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| Written by Josh Ramos |
| Saturday, 04 April 2009 12:41 |
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It seems that more and more people are struggling to pay their bills these days. Bankruptcy is one option that you should consider if your situation is severe enough. However, many people are under the impression that they can no longer file for bankruptcy due to recent changes in bankruptcy law. It's true that there have been some changes to the bankruptcy code, but it doesn't mean that you can no longer declare bankruptcy. I've spoken to a number of people who were surprised to find out that bankruptcy was still a viable option for their situation. In case you're wondering, the new law that everyone is talking about is named the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. (Try to say that three times fast.) The bottom line is that this makes the process of filing bankruptcy more complex, but few people have been made ineligible by the new law. The most important change in the code has been the means test, which is supposed to help the bankruptcy court decide whether your application is legitimate. Those with a relatively low salary will have an easier time getting through the process and will be able to avoid the means test. However, if your income is higher than the median for your state, then you'll have to go through a more intense process. You'll have to provide documentation of your income and expenses to show that you really can't afford to pay your bills. Otherwise, you might have to settle for chapter 13 bankruptcy in which you agree to a repayment plan instead of simply wiping out your debts. In addition, Congress mandated certain measures such as financial management classes to help ensure that you did not end up in another financial crisis in the future. Neither you nor your creditors would like to see that happen. Also, if your creditors request them, you must make your Federal tax returns available for review. Despite these additional rules and complex procedures, the odds are good that you will still be eligible for bankruptcy if you would have qualified under previous laws. One more thing you should consider about the new bankruptcy law is the increase in lawyer fees. Because the law is more complex, it will probably require more work from your attorney. This could result in higher costs, which is why you should prepare as much as possible before entering a bankruptcy law office. The more you know beforehand, the less work your lawyer has to do. About the Author: Don't let the fear of your debt take over your life. Get the facts about bankruptcy and learn how to get control of your debt. To learn more about what is personal bankruptcy visit us at http://personalbankruptcyquestions.org Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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