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understanding bankruptcy laws
A bankruptcy is the last option any businessman wants to take.
They can cause a big dent on their credit rating and deeply ruin
their reputation. But sometimes filing for bankruptcy is the
only solution to get a person out of dire straits. Here are the
nine steps to be followed in filing a bankruptcy:
1. See to it that there is no other solution that you can do to
avoid filing for bankruptcy. Bankruptcy allows for a fresh
start. Under the Bankruptcy Abuse Prevention and Consumer
Protection Act ("BAPCPA"), which significantly amended the U.S.
Bankruptcy Code effective October 17, 2005, prior to filing a
bankruptcy case, an individual must
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New Bankruptcy Law - Five Essential Things to Know
Last April, Congress passed the Bankruptcy Abuse and Consumer Protection Act, the most sweeping reform of our nation's bankruptcy laws in more than twenty-five years. Proponents of the bill argue that most consumers who file for bankruptcy do so simply because they do not wish to pay their bills. That is an arguable point, as studies show that most bankruptcy filers have suffered illness, injury or job loss. Regardless of the reasons, Congress has made the changes, and millions of Americans will be affected when the new law takes effect on October 15.
Here is a short list of the changes and how consumers will be affected.
Goodbye, Chapter 7 - Until now, most consumers have been permitted to file under Chapter 7 of the Federal bankruptcy code. Chapter 7 permits the court to wipe away most consumer debt, allowing the debtor to make a fresh start. The new law establishes a "means test." Anyone with income that exceeds the median income for his or her state will have to file under the stricter Chapter 13 instead, which requires a repayment schedule of up to five years.
Attorney problems - The more complicated Chapter 13 filings will make it necessary for filers to hire an attorney. Most attorneys who practice bankruptcy law are already reporting dramatically increased business; some are even turning clients away. If you need an attorney, hire one now, as they are soon going to be very busy
More attorney problems - The law also leaves lawyers legally responsible for the accuracy of the information filed on their clients' behalf. This has led most lawyers to increase their fees. Some, including those who do bankruptcy work on a pro bono, or free, basis, have decided to forego bankruptcy work altogether. In short, it will soon be more difficult and more expensive to hire an attorney.
Mandatory credit counseling - Congress has required that debtors obtain credit counseling from an approved agency within six months of filing for bankruptcy. As of now, this requirement is largely undefined, with rules, regulations, and qualifications for counselors still up in the air.
Expect to may more bills - Some obligations, such as student loans or taxes, must be paid in full even after a bankruptcy filing. The new law lengthens the list of debts that cannot be forgiven.
The new legislation, rightly or wrongly, makes it more difficult, more time consuming and more expensive for a debtor to file for bankruptcy. Consumers who are considering doing so should act now, as the regulations will soon become stricter. Bankruptcy should always be a last resort option, but if you cannot avoid it, you should act quickly.
About the Author
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to establishing credit, debt consolidation and credit counseling.
Charles Essmeier
bankruptcy home loan refinance
Bankruptcy laws give debtors a way to resolve debt by dividing their assets among their various creditors and in some cases will allow debtors to be freed of outstanding debts that cannot be paid, even after the division of assets. For individuals who find themselves unable to pay their debts, bankruptcy can be a viable option. As a debtor, you are entitled to file for bankruptcy. There have been recent changes to bankruptcy laws that may affect your ability to discharge your debts without credit counseling, but individuals who have found themselves unable to pay their debts can still file
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'Bankruptcy' the term that can raise the goose bumps of almost
every individual who hears it and even a nervous breakdown to
those who confront it. Bankruptcy stands for the situation when
a person runs into huge debts and there is hardly any money left
with him to repay those debts. The clouds of bankrupt situation
can hover over anybody's life be it a successful business man
who has never ever fathomed it or any greenhorn entrepreneur who
had thought of going a long way ahead.
There are several reasons behind this insolvency-
Indebtedness-people usually take big loans from the banks and
private companies in order to run successfully
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