Just another WordPress weblog
September 22nd, 2008

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 nations 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.

    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.

    Searching for a Waterbury Bankruptcy Attorney?
    If you live in Waterbury, CT, and are considering filing for bankruptcy, then you should seek the services of a specialized a...

    Thinking About Bankruptcy? Is Bankruptcy The Right Choice?
    Are you contemplating filing for a personal bankruptcy? Is even thinking about bankruptcy enough to scare you senseless? Bank...

    The Facts About Bankruptcy
    Bankruptcy HistoryThe laws of bankruptcy were created to help people who had accumulated a large amount of debt an opportunit...

    Personal Bankruptcy Lawyer - Tips to Hire a Good One
    A personal bankruptcy lawyer will explain to you various bankruptcy laws. He/she will also guide you regarding which chapter ...

    Filing Personal Bankruptcy UK
    Are you battling with your debts and feeling financially strained? Is filing bankruptcy uk the only solution you feel? Learn ...

    Life After Bankruptcy
    Nobody files for bankruptcy with a completely fatalistic outlook on what lies ahead. Since the provisions available under ban...

    Finding Cheap Bankruptcy Lawyers For You
    In this age of living on credit cards it is not surprising to find that more and more people are filing for bankruptcy. In or...

    Evaluating The Bankruptcy Cost
    If you are planning to file for bankruptcy, you will have to keep several things into your careful consideration bankruptcy ...

    Personal Bankruptcy in Manchester, England
    Here are some basic facts to consider up front before making a declaration of bankruptcy in Manchester:- If you have any sign...

    Chapter 13 Bankruptcy - An Overview
    Chapter 13 bankruptcy is also known as Wage Earner Plan or reorganization bankruptcy. The bankruptcy as per this chapter of t...

    Tips For Selecting A Bankruptcy Lawyer
    It almost goes without saying that you do not want to file bankruptcy, but if you have exhausted all viable options, your nex...

    Free Bankruptcy Forms - A Relief For The Debtors
    There are several misconceptions among people regarding the free bankruptcy forms. This article will try to explore some myth...

    Chapter 7 Bankruptcy - A Quick Overview
    The concept of bankruptcy that the common person has, is about the chapter 7 bankruptcy. This type of bankruptcy is also term...

    How A Good Bankruptcy Lawyer Can Help You
    Bankruptcy laws are extremely complicated and nearly impossible for the average person to understand. With the new bankruptc...

    Rebuilding Credit After Bankruptcy
    One of the major effects of bankruptcy is the damage to the persons credit standing.Individuals who have gone through bankrup...

    Hurricanes and Bankruptcy
    During the 2005 Atlantic tropical hurricane season there were many bankruptcies from small businesses and individuals who cou...

    When is the Right Time to Consider Filing Bankruptcy?
    There are many reasons why individuals file for bankruptcy, but more often than not it is a accumulation of several reasons t...

    Bankruptcy Law - How The Changes Affect You
    If you are considering bankruptcy, you need to be aware of the recent drastic changes in the bankruptcy laws. It used to be t...

    How To Avoid Bankruptcy If At All Possible
    Bankruptcy is when a person makes a legal declaration stating that one is legally insolvent. This article will deal with vol...

    Learn The Pros And Cons Of Bankruptcy
    People have to file for bankruptcy and therefore there are pros and cons of bankruptcy that need to be understood before taki...

    Posted in Bankrupcy |

    This entry was posted on Monday, September 22nd, 2008 at 6:15 pm and is filed under Bankrupcy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.