All the information, articles, and tools that you need when facing debt and bankruptcy!
Wednesday, March, 10th, 2010
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All the information, articles, and tools that you need when facing debt and bankruptcy! Wednesday, March, 10th, 2010 |
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Bankruptcy Reform Act There have been big changes in United States Bankruptcy law recently that affect anyone deciding whether to file bankruptcy or to deal with high debt burdens through debt consolidation or other means. Credit card companies and financial institutions have pressured the government to make major changes in how bankruptcy filings are handled in US courts.On April 20th, 2005 a new bankruptcy reform act was signed into law by President Bush. It goes into effect in October, 2005. Under the new law those in debt are required to first engage in consultation with an approved consumer credit counseling organization to try to find a plan to pay their debts without filing bankruptcy. If attempts to find a plan fail, the debtor must have certification from that credit counseling agency that there is no reasonable way that the debtor can pay off what is owed. In order to determine whether the debtor can reasonably repay his debts, a "means-test" will be used. This test is the deciding factor as to whether bankruptcy can be filed or whether the debtor will be required to pay off some or all of the amounts owed. This is Chapter 13 bankruptcy. The bankruptcy reform act also requires that the debtor produce more documentation than was previously required in a bankruptcy filing. The waiting period between Chapter 7 filings has been extended from 6 years to 8 years. Before final discharge of the debts owed the debtor must complete a course in personal financial management. The new bankruptcy reform act includes other changes and those considering filing bankruptcy should review these changes before making the final decision. Fast and simple declaration of bankruptcy is now a thing of the past. The repercussions to those filling are more drastic and if other alternatives exist, they are strongly recommended.  |
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