Bankruptcy law reform took effect in October 2005, and may or may not affect you. If your income is less than or more than the median income in your state of residence, your bankruptcy filing options may be affected. If your regular, verifiable income is more than your state's median, you may be allowed to file Chapter 13 only. However, if your regular monthly income is less than your state's median income, you will still be permitted to file chapter 7 or Chapter 13 petitions. Your bankruptcy attorney will help you compute the necessary information to substantiate your situation which will determine the chapter of bankruptcy that is best suited for your situation. An experienced bankruptcy attorney can inform you of all your options and help you through the entire bankruptcy process. For instance, you will have to take a credit counseling course, prior to your bankruptcy filing. You will also be required to take a personal financial management course after the 341 meeting, or meeting of the creditors, and submit it to the court or your case will be dismissed and you will not receive a discharge on your debts. While some have criticized these new requirements, you might receive some good information about credit and managing your budget so that hopefully you can avoid future financial pitfalls.
Recent changes in the federal law require different standards for a person to file a valid petition for bankruptcy protection. The burden of proof of a person's inability to pay off his/her debts has increased substantially. The federal bankruptcy court or bankruptcy district court must apply the Bankruptcy Law to all petitions coming before them, regardless of the state in which they operate. Hence, the bankruptcy court must now make additional judgments based on the results of the petitioner's counseling requirement and higher level of proof that a payoff of all debt is a financial impossibility. Even with the higher burden of proof, most people who are in the financial situation where they are drowning in debt and need to file bankruptcy still qualify.
There are many myths about bankruptcy and here are a few. First, it's harder to file bankruptcy since the law has changed. The new laws, which went into effect October, have not made it harder to file for bankruptcy. There are a few new requirements, but most of it is simply more paperwork and a few extra administrative steps. A recent study showed that 97 percent of people who filed under the old law would still be eligible under the new law.
The next one is, you will lose everything after a bankruptcy filing. Most people who file bankruptcy don't lose anything. Legal protections exist to allow you to keep your household goods, pension plan and 401 (k), bank accounts, and even your car and home, up to allowable legal limits. That is why obtaining the help of a reputable bankruptcy attorney is key to avoid any problems and ensure that the debtor retains as much personal property as possible while eliminating their debts.
Recent changes in the federal law require different standards for a person to file a valid petition for bankruptcy protection. The burden of proof of a person's inability to pay off his/her debts has increased substantially. The federal bankruptcy court or bankruptcy district court must apply the Bankruptcy Law to all petitions coming before them, regardless of the state in which they operate. Hence, the bankruptcy court must now make additional judgments based on the results of the petitioner's counseling requirement and higher level of proof that a payoff of all debt is a financial impossibility. Even with the higher burden of proof, most people who are in the financial situation where they are drowning in debt and need to file bankruptcy still qualify.
There are many myths about bankruptcy and here are a few. First, it's harder to file bankruptcy since the law has changed. The new laws, which went into effect October, have not made it harder to file for bankruptcy. There are a few new requirements, but most of it is simply more paperwork and a few extra administrative steps. A recent study showed that 97 percent of people who filed under the old law would still be eligible under the new law.
The next one is, you will lose everything after a bankruptcy filing. Most people who file bankruptcy don't lose anything. Legal protections exist to allow you to keep your household goods, pension plan and 401 (k), bank accounts, and even your car and home, up to allowable legal limits. That is why obtaining the help of a reputable bankruptcy attorney is key to avoid any problems and ensure that the debtor retains as much personal property as possible while eliminating their debts.
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