Has the bankruptcy law really changed that much?
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It seems that more and more people are struggling to pay their bills these days. Bankruptcy is one option that you should consider if your situation is severe enough. However, many people are under the impression that they can no longer file for bankruptcy due to recent changes in bankruptcy law.
Yes, Congress did make some changes in the bankruptcy laws, but it did not eliminate bankruptcy as a possible solution. You might be surprised to find out that you can still qualify for bankruptcy protection.
The new law, passed by Congress in 2005, makes the entire ordeal a more complicated process to undergo. Despite what you may have heard, however, chances are you'll still be eligible under the current system.
One of the main components of the new code is known as the means test. This test was designed to help determine whether you really need bankruptcy based on your income and expenses. If you have a relatively low income when compared to others in your state, then the bankruptcy means test will not be necessary in your case.
However, if your income is higher than the median for your state, then you'll have to go through a more intense process. You'll have to provide documentation of your income and expenses to show that you really can't afford to pay your bills. Otherwise, you might have to settle for chapter 13 bankruptcy in which you agree to a repayment plan instead of simply wiping out your debts.
In addition, Congress mandated certain measures such as financial management classes to help ensure that you did not end up in another financial crisis in the future. Neither you nor your creditors would like to see that happen.
You also must make your federal income tax returns available to your creditors if they desire it. Again, the goal is to prove that you're unable to pay your bills with your current income while being able to put food on table.
One very real downside of the new laws is the possibility of higher lawyer fees because of the extra work involved. If this happens in your situation, be sure to write your congressman and yell appropriately. In the meantime, visit a bankruptcy lawyer for more information to help determine what the best course of action is for you.
Article Source: Articlelogy.com
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