Working With The New Bankruptcy Law!
In recent years with the new bankruptcy law now in place, it has become far harder to apply for bankruptcy and also the prices of bankruptcy attorneys have gone up, since there is now more work for them to do.
So what are the main changes that have been made to the new bankruptcy law?
A so-called “means test” has been created in order to better assess whether or not a person is right for bankruptcy.
Basically what will take place during the means test is that your monthly income, minus a few expenses, will be calculated and compared with the average American income, if you are above it you will be directly obligated to file for chapter 13.
The IRS sets up strict guidelines for what they call ?allowable expenses.? Herein you will be allowed $200 per month for food and $800 per month for housing expenses.
Obviously in each state of the United States of America the laws do tend to change a little, depending on the state you reside in, this may help you or it may hinder you.
You will be forced by the IRS to pay out around about 75 $ on a credit counseling course that you will have to attend within 180 days from the date you first file for bankruptcy.
Under the all new bankruptcy law there is now more paperwork that you will have to do so that you can prove that bankruptcy is necessary.
Here’s a few things you will need to provide the IRS: a list of all your expenses for each month and your monthly income sources, a list of all secured as well as unsecured creditors, assets and liabilities, the most recent tax return you have and of course your photo ID.
Because of a lot of the changes in the new law, your bankruptcy attorney is going to have a lot more work on his hands and so you will have to pay him a lot more.
Interpreting the bankruptcy law
By law you are not obligated to use the services of a bankruptcy lawyer, however it is certainly highly recommended that you do in less of course you have qualifications in this area.
The one thing that you must remember is that bankruptcy, no matter the circumstances, is always your absolute last option. If you file for bankruptcy it will stay on your public record for up to 10 years, so if you can avoid it you will be most likely better off.
