This new law has also caused quite a stir among those trying to file for bankruptcy, and those who handle the cases. The restrictions on being to qualify to file a Chapter 7 bankruptcy have been severely tightened, and the Chapter 13 law has also been stiffened.
Some of the many changes to the bankruptcy law include:
· Credit counseling for 6 months prior to filing for a bankruptcy. · A debtor must have filed tax returns for the previous 4 years in a row before being able to file for a bankruptcy. · You must be able to prove with a good reason why the courts should take away your personal debts. This has forced more people to pay off their debts that previously would have been taken away by a bankruptcy in the old system. · Paying off a Chapter 13 bankruptcy within 3-5 years
Chapter 13 Bankruptcy
A Chapter 13 filing allows the debtor to keep some of their assets and reorganize their finances to pay the debts off. You must have a steady income in order to qualify. The court will set up a repayment schedule, and determine for you what your payment amounts will be. This type of bankruptcy filing is good for those people who have gotten into financial trouble, but still have a steady income and a means to pay off some of their debts.
Chapter 7 Bankruptcy
When someone has no means to pay off their debts they can file a Chapter 7 bankruptcy. This means that the court will completely liquidate your assets. In most cases though, you are allowed to keep your home, car, and other living necessities. Filing a Chapter 7 bankruptcy has become extremely difficult with the enactment of the new bankruptcy reform law. You will definitely need the advice of a qualified attorney prior to filing.
Something you need to keep in mind with either form of bankruptcy filing is that certain debts are not allowed to be included. You will still have to continue to pay off these debts completely. They include: · Unpaid Federal, State, or local taxes · Past due child support · Alimony · Student loans · Court related costs
Another factor to keep in mind is that any bankruptcy filing will remain on your credit report for 10 years. This can make getting any type of credit card, car or home loan, or credit of any kind, extremely tough. While you may still be able to find loans for a car or home, the interest and added fees will be very high. Keep these facts in mind when considering filing for any form of bankruptcy. Consider other possibilities and talk to credit professionals. You may find a way out of your financial trouble without having to file a bankruptcy.
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