What you need to know about the Bankruptcy law change
Many people are currently under the impression that bankruptcy is no longer an option for them because of recent changes to the bankruptcy law. They have been told through word of mouth about the bankruptcy reform law, and they assume that this option for a new financial start is no longer available.
While there have been changes made in recent years, bankruptcy is still a viable option that you should consider with your attorney. While it isn't for everyone, bankruptcy might be the best option for you depending on your circumstances.
In 2005, Congress passed a law which reformed the bankruptcy code. The law is pretty complex, even for attorneys, and many have criticized it for making things tougher on consumers. Nevertheless, the credit industry was successful in convincing Congress to pass the law.
The bottom line is that declaring bankruptcy will require you to take some additional steps including mandatory financial counseling. The most important revision in the bankruptcy code requires that you pass something known as the means test. The point of this test is that you have to prove that you do need bankruptcy.
The means test is designed to prove to the bankruptcy court that you really do need bankruptcy. If your income is lower than average (based on your state), then the process is much easier and you don't have to prove anything through a means test. If you have a higher income, however, you will have to take some additional steps.
If you do have to go through the means test, that means that you'll have to go to greater lengths to document your income (as well as your expenses). You must be very careful in putting together these documents, because any errors can create a world of hassle for you down the road.
It may seem like a painstaking process, but your lawyer should be there to help you through the process. In case you're wondering about trying to declare bankruptcy on your own, let me save you the trouble. Don't even think about going it alone. The new bankruptcy reform makes things much more complicated even for lawyers, let alone lay people.
A good bankruptcy lawyer will have kept up to date on all the developments. This is important because the new bankruptcy law is quite complex, and there will be various court rulings on how to apply the bankruptcy code to various situations. Your lawyer must be well versed in all these things.
While there have been changes made in recent years, bankruptcy is still a viable option that you should consider with your attorney. While it isn't for everyone, bankruptcy might be the best option for you depending on your circumstances.
In 2005, Congress passed a law which reformed the bankruptcy code. The law is pretty complex, even for attorneys, and many have criticized it for making things tougher on consumers. Nevertheless, the credit industry was successful in convincing Congress to pass the law.
The bottom line is that declaring bankruptcy will require you to take some additional steps including mandatory financial counseling. The most important revision in the bankruptcy code requires that you pass something known as the means test. The point of this test is that you have to prove that you do need bankruptcy.
The means test is designed to prove to the bankruptcy court that you really do need bankruptcy. If your income is lower than average (based on your state), then the process is much easier and you don't have to prove anything through a means test. If you have a higher income, however, you will have to take some additional steps.
If you do have to go through the means test, that means that you'll have to go to greater lengths to document your income (as well as your expenses). You must be very careful in putting together these documents, because any errors can create a world of hassle for you down the road.
It may seem like a painstaking process, but your lawyer should be there to help you through the process. In case you're wondering about trying to declare bankruptcy on your own, let me save you the trouble. Don't even think about going it alone. The new bankruptcy reform makes things much more complicated even for lawyers, let alone lay people.
A good bankruptcy lawyer will have kept up to date on all the developments. This is important because the new bankruptcy law is quite complex, and there will be various court rulings on how to apply the bankruptcy code to various situations. Your lawyer must be well versed in all these things.
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 is there life after bankruptcy visit us at http://personalbankruptcyquestions.org
posted by Debt Consolidation Loan at
3:12 AM
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