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.
Much of the confusion comes as a result of the new bankruptcy reform which was passed by Congress and signed by President Bush in 2005.
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.
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.
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.
Much of the confusion comes as a result of the new bankruptcy reform which was passed by Congress and signed by President Bush in 2005.
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.
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.
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 the answers to common questions about bankruptcy visit us at http://personalbankruptcyquestions.org
posted by Credit Counseling at
3:13 AM
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