The new bankruptcy laws have been introduced and many are aware about the new underlying provisions. These new laws really paved the way for a drastic change in filing bankruptcy. Making bankruptcy something that is more strict and less available.

The whole idea of the new bankruptcy laws was to limit bankruptcy filings and help to protect both the creditor and debtor. Filing bankruptcy is not an easy solution nor is it something that a person should do just because they do not want to repay debts. With that in mind the new bankruptcy laws changed the face of bankruptcy for everyone.

The new laws help to ensure people can not rush into filing bankruptcy. The new procedure now entails concerned individuals to have clear understanding on the implications of filing of bankruptcy. Moreover, eligibility in filing Chapter 7 bankruptcy has already been restricted to a set of income group. This is to prevent misuse of Chapter 7 Exemptions.

Thing to Consider About Filing

Filing bankruptcy is not an ending to financial problems. When you file bankruptcy due to severe financial problems then you will still have those problems even after you file. The bankruptcy procedures can give you is more flexibility in handling your debts. It is not the ultimate solution to 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 is hard on you and creditors. Your credit will suffer due to filing. Creditorslose money over bankruptcy 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, the filer concerned is eligible to file Chapter 11 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

The counseling requirements of the new bankruptcy laws are in place to help ensure that everyone filing bankruptcy understands the process and understands the importance of getting their personal finances under control.

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 are mandatory sessions regardless of the type of bankruptcy.

The new bankruptcy laws were put in place to stop abuse of the system and process. Creditors benefit greatly from the lower number of Chapter 7 filings under these laws. Many people who go to file must file a Chapter 11 bankruptcy now under the new laws.

Filing bankruptcy should always be your last recourse if all possible ways to settle your debts have been exhausted. It is something that will taint on your credit record for a while and can prevent you from obtaining credit in the future Additionally, you can lose assets through the process that are seized to pay off debts. However if you are heavily indebted, resorting to filing of bankruptcy may ease up your burden since it helps you get grip in putting your finances under control.

If you need bankruptcy assistance, let us know.