Every year many good citizens are forced to hire a bankruptcy attorney. In the current volatile economy, people are seeking answers. Unfortunately, filing for a bankruptcy is the best solution for many families. A bankruptcy attorney realizes that good people go through bad times. And it is not always poor financial habits that cause this. In fact, record numbers of people are filing bankruptcy in America because of the economic downturn. A bankruptcy attorney can help you keep your home and transportation. Certain things are essential to living, and the bankruptcy laws provide some protection from debtor's possessions being seized.
Furthermore, the new legislation enacted in April 2005 has made it more difficult to file a chapter 7 bankruptcy. The complex laws are intricate and arduous; thus, an experienced bankruptcy attorney can help you go through the process smoothly. The requirements for filing a chapter 7 bankruptcy have changed. The new bankruptcy code requires the court to apply certain formulas to evaluate a debtor's income. For example, the "means test" is done by taking the debtors monthly total income and comparing it to the mean value of other taxpayers. By taking an average of all salaries made in a state, the court can determine a mean value. Then, the court determines whether the income of the debtor meets the criteria for filing a chapter 7 bankruptcy. If this test is failed, the next test takes the monthly income of the debtor and subtracts their living expenses. Then, the remaining amount is evaluated. The results of this test determine if the debtor will be allowed to file a chapter 7 bankruptcy.
Also, the new bankruptcy laws hold the bankruptcy attorney accountable for the accuracy of the information. In the past, lawyers could accept their client's financial information and not subject it to thorough examination. The court will hold the bankruptcy attorney personally liable if the information is not correct. Another change in the current laws is requiring the debtor to attend credit counseling sessions. A bankruptcy attorney can not even file the claim until this requirement is met. And the credit counseling sessions must be completed 6 months prior to filing of the bankruptcy. The new restrictions place pressure on many families that truly need to file a chapter 7 bankruptcy.
Those that do not qualify for the chapter 7 filing can proceed with a chapter 13; however, this bankruptcy is a repayment plan. All creditors must be paid over a period of three to five years. An experienced bankruptcy attorney can help you through this difficult process. Clients must stick to a restrictive budget and make timely monthly payments to the court trustee, but the final result is repaired credit. And the debtor has the satisfaction of knowing that their debts were satisfied. Although a bankruptcy attorney can help you start over, you must take the steps necessary to build a clean credit history.
