Has the Bankruptcy law changed that much?
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.
It's true that there have been some changes, but bankruptcy remains an option that you can and probably should discuss with a lawyer (and possibly a financial adviser if you can afford it). Bankruptcy is certainly not appropriate in every situation, but it can be a lifesaver for many individuals with overwhelming amounts of debt.
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 law places additional requirements for those trying to declare bankruptcy, and these requirements include mandatory counseling and having to prove your income and your need for bankruptcy. Still, bankruptcy has not been eliminated as an option for most people. You may have to go through some additional requirements, however, such as the means test.
If your annual income is lower than the median income for your state, then you don't even have to worry about this so called bankruptcy means test. That's because if your income is very low, it's not hard to believe you when you say that you're broke. If your income is higher than the median, you will have to go through a more rigorous process to prove that you need to declare bankruptcy.
This really boils down to putting together a well documented list of all of your income and expenses. Be careful not to make any omissions, or this can come back to bite you later on.
Your lawyer should be able to help you with specifics, but it can be quite a tedious process. Going through this without a lawyer is not an option, especially with the latest changes in the bankruptcy code. The new law simply makes things too complex for the average person.
Of course, it helps to be as informed as possible before going to visit any lawyer. Reading more articles like this one will help you make a more informed choice and will help your visit with a lawyer go more smoothly. This can even end up being less work for the lawyer, which means a lower cost for you.
It's true that there have been some changes, but bankruptcy remains an option that you can and probably should discuss with a lawyer (and possibly a financial adviser if you can afford it). Bankruptcy is certainly not appropriate in every situation, but it can be a lifesaver for many individuals with overwhelming amounts of debt.
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 law places additional requirements for those trying to declare bankruptcy, and these requirements include mandatory counseling and having to prove your income and your need for bankruptcy. Still, bankruptcy has not been eliminated as an option for most people. You may have to go through some additional requirements, however, such as the means test.
If your annual income is lower than the median income for your state, then you don't even have to worry about this so called bankruptcy means test. That's because if your income is very low, it's not hard to believe you when you say that you're broke. If your income is higher than the median, you will have to go through a more rigorous process to prove that you need to declare bankruptcy.
This really boils down to putting together a well documented list of all of your income and expenses. Be careful not to make any omissions, or this can come back to bite you later on.
Your lawyer should be able to help you with specifics, but it can be quite a tedious process. Going through this without a lawyer is not an option, especially with the latest changes in the bankruptcy code. The new law simply makes things too complex for the average person.
Of course, it helps to be as informed as possible before going to visit any lawyer. Reading more articles like this one will help you make a more informed choice and will help your visit with a lawyer go more smoothly. This can even end up being less work for the lawyer, which means a lower cost for you.
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 how to avoid bankruptcy and pay off debt visit us at http://personalbankruptcyquestions.org
posted by Debt Consolidation Loan at
1:51 AM
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