• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
Download
 
 New Bankruptcy ProcessesFiling for bankruptcy is a provision given to people with debt problems for a chance tomake a fresh start. Recently, a new bankruptcy process has been introduced which makesfiling for bankruptcy more difficult than it was in the past years. This was done as aresponse to the number of people filing for bankruptcy.According to researchers from Lundquist Consulting, there will be more than 200,000 people who will be filing for bankruptcy. However, a great percentage of this number only want to get rid of their obligations to pay their debts.Today, filing for bankruptcy will require higher fees to bankruptcy lawyers since theywould have more duties and responsibilities in filing and processing documents. Under the new bankruptcy law, the bankruptcy lawyer will be held liable if any falseinformation is found in his client’s case.Therefore, bankruptcy lawyers will be required to pay penalty fees. In account of this,some lawyers may even increase their charges by as much as 100 percent. Obviously,consumers who are facing financial difficulty will have a harder time shouldering theseexpenses.In the past years, people who filed for a Chapter 7 bankruptcy have easily managed to getoff their debt. Much to their creditors’ dismay, these people were discharged from their debts. With a Chapter 7 bankruptcy, a borrower’s assets that qualify for liquidation will be given to his lenders. However, borrowers who do not have such assets get away withtheir debts while their lenders to settle for nothing.With a Chapter 13 bankruptcy, the bankruptcy court puts the borrower in a repayment plan for up to five years. This allows lenders to impose at least 10% interest to give borrowers the opportunity to pay back their debts more easily.However, since the new bankruptcy law has been implemented, consumers who are filingfor bankruptcy will be screened and only those that truly qualify will enjoy these bankruptcy provisions.In order to file for bankruptcy, an individual must first undergo credit counseling with agovernment accredited credit counseling agency. Through credit counseling, theindividual will be given financial management advice and training.Afterwards, a bankruptcy judge will be the one to decide whether a person is qualified for Chapter 7 bankruptcy or not. The judge’s decision will be based on a two-part incomemeans test of the consumer who filed for bankruptcy. Here, the individual’s capability asa borrower will be carefully examined based upon his expenses and his ability to pay hisdebts from what’s left of his monthly income. If the individual fails these tests, he maystill be allowed to file for Chapter 13 bankruptcy.
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...