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.
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.
However, this doesn't mean that you can no longer declare bankruptcy. There are some additional hurdles to go through, but it probably is still an option for you. The main provision of the new bankruptcy law has to do with something called the means test. Basically, you have to prove that you really are not able to pay for your debts with your current income.
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 will involve documenting your income and your expenses carefully. You absolutely have to document all of your creditors carefully, or you can have some difficulty later on if your case is reviewed and found to have errors.
It can seem like a painful process, but that's what your lawyer is there to help you with. Trying to declare bankruptcy without a lawyer would be pretty silly in my view. This new bankruptcy law in particular is quite complex, so you'll need the best bankruptcy lawyer that you can afford.
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.
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.
However, this doesn't mean that you can no longer declare bankruptcy. There are some additional hurdles to go through, but it probably is still an option for you. The main provision of the new bankruptcy law has to do with something called the means test. Basically, you have to prove that you really are not able to pay for your debts with your current income.
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 will involve documenting your income and your expenses carefully. You absolutely have to document all of your creditors carefully, or you can have some difficulty later on if your case is reviewed and found to have errors.
It can seem like a painful process, but that's what your lawyer is there to help you with. Trying to declare bankruptcy without a lawyer would be pretty silly in my view. This new bankruptcy law in particular is quite complex, so you'll need the best bankruptcy lawyer that you can afford.
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 using retirement funds to avoid bankruptcy visit us at http://personalbankruptcyquestions.org
posted by Debt Consolidation Loan at
11:35 AM
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