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Are New Bankruptcy Laws Supposed To Benefit You?
You will find 2 sides to the changes in bankruptcy rules. It's going to be a whole lot harder to file bankruptcy under chapter 7 and get a totally clean slate. For businesses, relying on issuing credit, the new personal bankruptcy law is doing great, decreasing personal bankruptcy claims from the thousands to double digits.
However, lawyers working with the actual individuals filing for bankruptcy say that the new law is severely flawed since it puts more financial burdens on already broke clients and reduces potential debt repayment to small businesses.
Under the new law it has become a requirement that the individual filing bankruptcy obtains credit counseling both before and after filing.
Folks filing bankruptcy in general aren't over spenders, but merely faced with temporary financial disasters such as medical costs, layoffs, a divorce, gambling debts or other crises. Before you can file bankruptcy, you're now required to complete credit counseling with an agency approved by the US Trustees office.
This credit counseling is developed to help you determine whether or not bankruptcy is ideal. Once you complete your bankruptcy, the law requires you to attend another credit counseling session. These are new requirements. Before this law was passed, the law did not demand a person to go through counseling either before or right after the filing of bankruptcy.
Second, under the old law, an individual could decide to file under Chapter 7 or Chapter 13. Under the new law, the court will take a look at your monthly income and apply a means test relating to the state in which you live. If your income is less than or equal to the medium income, you'll be allowed to file Chapter 7 which in effect will give you a clean slate.
This medium income can differ from twenty-eight thousand dollars in Missouri to approximately fifty-six thousand in Alaska. If your income is greater, you may be forced to file Chapter 13 unless you can demonstrate you do not have enough disposable income.
Under Chapter 13 you will not get a clean slate, but will need to make payments on your debts. Also, your attorney now has to personally certify that your bankruptcy filing is accurate. This would mean a lot more work for the attorney, with higher legal fees.
To cushion the burden, employ the help of an off-shore financial services provider. These types of financial services providers can offer you with excellent services. Discover how the nz finance company can help you!
"In the past, a bankruptcy offered a fresh start for the filer," said Columbia lawyer Gwen Froeschner Hart. "The new federal legislation presents language directed at helping creditors."
If you analyze credit card expenses for most people you'll see that they often consist of medical bills and day-to-day expenditures for the elderly or those earning low or fixed incomes. Records reveal that 50% of credit card holders don't pay their full credit card bills every month.
33% of the population can't afford medical insurance so they have to charge their prescription drugs. With the recent Medicaid cuts and rigid bankruptcy legislation, who knows what is going to happen to these folks.
There are some who say consumers are abusing creditors. The irony is that credit card businesses are begging for consumers and offering large amounts of unsecured credit, yet at the same time, lobbying for stricter debt controls.
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