Bankruptcy: New Laws You Need To Know

Bankruptcy - Congress has passed the Bankruptcy Abuse and Consumer Protection Act, the most sweeping reform of our nation's bankruptcy laws in more than twenty-five years. This legislation has made filing for personal bankruptcy a much more difficult proposition.

The potential chapter 7 debtor should understand that a straight bankruptcy case does not involve the filing of a plan of repayment as in chapter 13, but rather envisions the bankruptcy trustee's gathering and sale of the debtor's nonexempt assets, from which holders of claims (creditors) will receive distributions in accordance with the provisions of the Bankruptcy Code.

If you find yourself in a situation that you absolutely must declare bankruptcy, which type of bankruptcy should you consider? In most cases you should be seeking qualified legal counsel for the answers to these questions. The Bankruptcy Code's statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full.

If your income is above your state's median income, and if you can afford to pay 25 percent of your unsecured debt, you will "not" be allowed to file for a Chapter 7 Bankruptcy which means your debts can be wiped out and you can have a financially fresh start, you can start over.

If the individual has sufficient income that is regular and can pay for their day to day living expenses and have something left over to repay their debt then they can file Chapter 13 Bankruptcy.

The major result of the new law is that fewer people will be able to file for Chapter 7 Bankruptcy and will be forced to file for Chapter 13 Bankruptcy, instead. So under the new bankruptcy law there will be a lot fewer Chapter 7 and a lot more Chapter 13 filings.

The dramatic increase in bankruptcy filings has overwhelmed bankruptcy attorneys, who has had to face the additional burden of being liable for false information filed by their clients.

Get financial counseling if you are considering bankruptcy. There are sources where this information is absolutely FREE. For more information on this topic go to: http://www.bankruptcy-help.info
Ms.CiCi

Ms. CiCi, has a gift of teaching, is an accomplished author and world traveler who enjoys sharing her life's experiences with others, making their life, their world a bit easier. Her writings expose her wealth of "secret information" so derived from her travels as well as drawing from her own personal wealth of wisdom. A great lover of nature, a visit to her website is a true delight. http://www.CiCi-Online.Com