Many people are currently under the impression that bankruptcy is no longer an option for them because of recent changes to the bankruptcy law. They have been told through word of mouth about the bankruptcy reform law, and they assume that this option for a new financial start is no longer available.
It's true that there have been some changes, but bankruptcy remains an option that you can and probably should discuss with a lawyer (and possibly a financial adviser if you can afford it). Bankruptcy is certainly not appropriate in every situation, but it can be a lifesaver for many individuals with overwhelming amounts of debt.
Much of the confusion comes as a result of the new bankruptcy reform which was passed by Congress and signed by President Bush in 2005.
However, this doesn't mean that you can no longer declare bankruptcy. There are some additional hurdles to go through, but it probably is still an option for you. The main provision of the new bankruptcy law has to do with something called the means test. Basically, you have to prove that you really are not able to pay for your debts with your current income.
If your annual income is lower than the median income for your state, then you don't even have to worry about this so called bankruptcy means test. That's because if your income is very low, it's not hard to believe you when you say that you're broke. If your income is higher than the median, you will have to go through a more rigorous process to prove that you need to declare bankruptcy.
If you do have to go through the means test, that means that you'll have to go to greater lengths to document your income (as well as your expenses). You must be very careful in putting together these documents, because any errors can create a world of hassle for you down the road.
Your lawyer should be able to help you with specifics, but it can be quite a tedious process. Going through this without a lawyer is not an option, especially with the latest changes in the bankruptcy code. The new law simply makes things too complex for the average person.
Of course, it helps to be as informed as possible before going to visit any lawyer. Reading more articles like this one will help you make a more informed choice and will help your visit with a lawyer go more smoothly. This can even end up being less work for the lawyer, which means a lower cost for you.
It's true that there have been some changes, but bankruptcy remains an option that you can and probably should discuss with a lawyer (and possibly a financial adviser if you can afford it). Bankruptcy is certainly not appropriate in every situation, but it can be a lifesaver for many individuals with overwhelming amounts of debt.
Much of the confusion comes as a result of the new bankruptcy reform which was passed by Congress and signed by President Bush in 2005.
However, this doesn't mean that you can no longer declare bankruptcy. There are some additional hurdles to go through, but it probably is still an option for you. The main provision of the new bankruptcy law has to do with something called the means test. Basically, you have to prove that you really are not able to pay for your debts with your current income.
If your annual income is lower than the median income for your state, then you don't even have to worry about this so called bankruptcy means test. That's because if your income is very low, it's not hard to believe you when you say that you're broke. If your income is higher than the median, you will have to go through a more rigorous process to prove that you need to declare bankruptcy.
If you do have to go through the means test, that means that you'll have to go to greater lengths to document your income (as well as your expenses). You must be very careful in putting together these documents, because any errors can create a world of hassle for you down the road.
Your lawyer should be able to help you with specifics, but it can be quite a tedious process. Going through this without a lawyer is not an option, especially with the latest changes in the bankruptcy code. The new law simply makes things too complex for the average person.
Of course, it helps to be as informed as possible before going to visit any lawyer. Reading more articles like this one will help you make a more informed choice and will help your visit with a lawyer go more smoothly. This can even end up being less work for the lawyer, which means a lower cost for you.
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Don't let the fear of your debt take over your life. Get the facts about bankruptcy and learn how to get control of your debt. To learn more about filing for bankruptcy visit us at http://personalbankruptcyquestions.org
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