chapter 7 bankruptcy information
How have chapter seven bankruptcy laws changed?
If you’re seriously buried in debt and don’t know what to do, bankruptcy may be the option you’re looking for. You shouldn’t make the final decision until you discuss things thoroughly with a good lawyer and look at all your other options carefully. However, it may give you the relief you’re looking for.
But wait a minute. Isn’t bankruptcy defunct due to the recent changes in the bankruptcy code? Not at all. Congress did make some changes that make the process more involved, but there’s still a great chance that you’ll be eligible to file for bankruptcy if you make the decision.
The new chapter seven bankruptcy laws make the process longer and more painstaking for the individual consumer, but chances are you can still use bankruptcy if you need to. It’s important to understand the difference between the major forms of bankruptcy. The most common form, and the one you probably are thinking about, is chapter seven.
In case you don’t already understand the different types of bankruptcy, chapter seven is what most people are looking for. It will eliminate your debt, but under the new law you are required to pass the means test. The idea here is to try and figure out whether you have the means to get out of debt and are simply trying to exploit the bankruptcy process.
If your income is below the median income for your state, then you won’t even have to worry about taking the means test. If your income is higher, you will have to go through a painstaking process with your lawyer at your side.
The bottom line is that you’ll probably be eligible for chapter seven bankruptcy. Otherwise, you’ll have to go with chapter 13 which gives you a payment plan instead of eliminating your debt.
Some of the other changes in the recent bankruptcy law require you to take credit counseling and financial management classes as part of the process. The goal is to make you more financially savvy so you don’t end up in the same situation again.
Some have criticized these changes in the bankruptcy code as being bad for consumers, but we have to deal with them at least for the time being. The important thing is to have a good lawyer help you sort things out since the law is much more complex now.
Having the right knowledge and skills is critical to your financial success. When it comes to declaring personal bankruptcy, this is especially true. Not having this knowledge may have helped cause your problem to begin with, since you probably developed for spending habits. Now that you’re in this mess, finding the best chapter 7 bankruptcy attorney you can afford is essential to success.
The need for a lawyer to help you go through the bankruptcy process has only become more critical due to the changes in the bankruptcy law. Despite popular misconceptions, Congress did not eliminate bankruptcy as an alternative for your debt problems.