New Bankruptcy Laws - New Challenges
Most people have heard about the new bankruptcy laws. These new laws really changed a lot of things about filing bankruptcy. With these laws, the option of filing bankruptcy has become more stiff and difficult to avail of.
Here’s an overview about the new bankruptcy laws.
The rationale behind the new bankruptcy laws is to reduce cases of filing bankruptcy and to provide safety nets to creditors and debtors. Filing bankruptcyis a difficult way out to escape from paying ones debts. With these amendments, the course of filing bankruptcy has significantly changed.
The new laws restrain abrupt filing of bankruptcy. The new procedure now entails concerned individuals to have clear understanding on the implications of filing of bankruptcy. Additionally, some income groups are not able to file Chapter 7 bankruptcy anymore.
Thing to Consider About Filing
Filing bankruptcy is not an ending to financial problems. Your financial problems will still exist even after filing. All bankruptcy can do is help you get debts under control. It will not solve your financial problems.
Advocacy is an inherent component of the new bankruptcy laws to ensure full understanding of the concept. By requiring counseling, when you file bankruptcy you will get help to learn how to get back on track financially and stay away form problems in the future.
Bankruptcy both affect you and your creditors Your credit will suffer due to filing. Creditors incur loses in dealing with debtor’s bankruptcy option. This is the reason why the new laws have limited access to filing of Chapter 7 bankruptcies which can erase debts and impose instead filing of Chapter 11 option which requires debt payment.
Income Limits
The new bankruptcy laws require a means test which will determine the income of the filer.If the income level is deemed high enough,a person will have to file Chapter 7 Bankruptcy and repay debts. Lower income filers will still be able to file Chapter 7.
The said means tests consider various factors in assessing whether a debtor can repay debts under court sanctioned repayment procedure.
Counseling Requirements
A counseling requirement forms part of the new bankruptcy laws.
The counseling sessions are required before filing and then again before the bankruptcy is finalized. Both the stages of filing and approval require counseling sessions. These classes are mandatory no matter what type of bankruptcy is being filed.
The new bankruptcy have been carried to address apparent abuses of the system and procedure. Creditors benefit greatly from the lower number of Chapter 7 filings under these laws. Filing of Chapter 11 Bankruptcy has become a requirement.
Filing bankruptcy should always be your last recourse if all possible ways to settle your debts have been exhausted. It is something that willtaint on your credit record for a while and can prevent you from obtaining credit in the future Additionally, you can loseassets through the process that are seized to pay off debts. Overall, though, if you are in serious debt bankruptcy may be the key to getting your finances back under control.