What are the changes in the chapter 7 bankruptcy laws
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The recent changes in the bankruptcy code put several more obstacles in the way of consumers, but in the end chances are you'll still qualify for bankruptcy.
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What are the changes in the chapter 7 bankruptcy laws
- 1. What Are the Changes in the Chapter 7 Bankruptcy Laws? Bankruptcy has long been a legitimate option for those who find themselves completely overwhelmed by their debt. While it is a serious step and should not be taken lightly, filing for bankruptcy is certainly a possibility for many people. It does have long-term financial consequences, but it can also provide a much needed fresh start for many people. Many people today assume that bankruptcy has been eliminated as an option for a large percentage of Americans due to the recent bankruptcy reform law. Though there certainly have been changes, only a small percentage of Americans who could've filed a few years ago are no longer eligible under the new law. So what are the changes in the chapter 7 bankruptcy laws? The recent changes in the bankruptcy code put several more obstacles in the way of consumers, but in the end chances are you'll still qualify for bankruptcy. Chapter seven bankruptcy, by the way, is designed to discharge (or eliminate) all of your debt. However, under the changes that were recently made, you have to prove that you're not able to pay off your debts by taking something called the means test. This test looks at your current income and expenses to see if you really are in over your head. 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. At the end of the day, you will most likely qualify for chapter seven. If you don't, you can choose to file chapter 13 bankruptcy, which creates a repayment plan for the next few years instead of simply wiping out 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.