Bankruptcy Filing Tips

more restrictive bankruptcy laws take effect in October 2005

In a few weeks, President Bush declared bankruptcy Abuse Prevention and Protection Consumer Law enters into force. In short, the new law will come into force on October 17, 2005, makes it harder to pay off their debts under Chapter 7 protection bankruptcy. Instead, consumers would have to seek bankruptcy protection Chapter 13 and pay creditors over a period of five years.

Here's a look at some of the important changes that will affect consumers choosing to file for bankruptcy after the new law comes into force –

Classification – Chapter 7 or 13?

To qualify for protection under Chapter 7 bankruptcy, consumers will face a means test. The means test determines if your household is above or below the median income in the state you reside. Those whose total is greater than the median income State shall not be entitled to cancel the debt under Chapter 7 protection and it must have under Chapter 13 and repay creditors.

The main intention of the bankruptcy reform is to ask people who can afford to make payments on its debt, to make such payments, while giving them the right to make the rest of their debt erased.

The amount you will pay under Chapter 13 protection will be greater because instead of a payment of three years ago period, this period is now extended to five years – to ensure your creditors are paid.

Credit Counseling

Any person under the new bankruptcy law will be necessary to go through credit counseling. Be careful when choosing a credit counselor that this area is full of people looking to fill their pockets while emptying yours.

To find a trusted advisor, check for complaints against them or their organization filed the office of business ethics. On the other hand, if they are certified by the National Foundation for Credit Counseling or the Association of Independent counseling agencies consumer credit. Finally, if they have nonprofit status. Personally, I like Consumer Credit Counseling Services recommends that meet the three criteria above. They can contact us at 1-800-888-2227 and connect with a local office.

The cost factor

Presentation for Chapter 7 protection under the laws of age usually cost less than $ 1,000. You should expect to pay more under the new laws as filing fees increased by $ 60. In addition, your lawyer will ask review all your financial information will take longer. There is also greater responsibility imposed on the attorney who can cause their liability insurance for increase, which is transmitted to its customers in the form of higher taxes. Under the new law, many expect costs to rise by 25-50%.

Why the laws changed?

The key is that major commercial creditors lobbied hard for reform. Companies like Citibank, MBNA and other card issuers Credit actively contributed proposed amendments with the generous financial support of the bankruptcy reform legislation – and in his favor, according to many security groups the consumer.

© 2005 editreportnow.com http://www.yourfreecr

About the Author

James is editor of “TO YOUR CREDIT”, a free weekly newsletter
with tips to help you manage your personal finances. Subscribe
today and receive his ebook “IDENTITY THEFT- How To Avoid
Becoming the Next Victim!” and other free bonuses by visiting http://www.yourfreecr
editreportnow.com.

Implementing the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005: Consumer Bankruptcy

Dealing With Bankruptcy And Your Spouse

There are so many reasons why people go to court to file a bankruptcy petition. Soaring medical bills and recession in the economy could be some of the reasons that many people opt for filing a petition. The most important thing is to have the protection of the court against the creditors who would otherwise harass the you for payment of debts. There are mainly two chapters under which an individual can fie a financial distress petition.

The liquidation chapter allows for the debtors assets to be sold and the proceeds to be divided amongst the creditors while in the wage-earner or chapter 13, the debtor continues to work as they make monthly payments towards the debt. Some people worry about what will happen to them in case their spouse filed a bankruptcy petition in court.

It is important for such people to know that the debtor is expected to continue paying a monthly fee towards child support and former spouse support. Unlike in the cases of other debts, these cannot be discharged. In cases where the financial distress has happened before a divorce and yet the couple wish to go on their separate ways after the bankruptcy, it would be better if they first finished with the financial crisis first before they can go through the divorce.

This way the debts between the couple will be a less burden to carry in case they went their separate ways. It will make the divorce process a simpler one. In cases where the debt falls in the name of both spouses, it would be much better for the couple to go to court together to file a financial distress petition. This way, the costs will be bearable than when they its done separately.

About the Author

Peter Gitundu Creates Interesting And Thought Provoking Content on Finance. For More Information On How To Deal With Bankruptcy, Read More Of His Articles Here DEALING WITH BANKRUPTCY If You Enjoyed This Article, Make Sure You SUBSCRIBE TO MY RSS FEED!

Spouse Left, Is Bankruptcy Necessary?