How Did the New Federal Bankruptcy Laws Affect Chapter 7 Bankruptcy?

[somerset]

Chapter 7 bankruptcy is one of the mortgage debt help options that not many debtors want to opt for. However, there are many debtors that are left with no other option but to file bankruptcy. Earlier it was easy to file chapter 7 bankruptcy. With the introduction of the new federal bankruptcy laws, filing bankruptcy has become very rigid. The new federal bankruptcy laws have been introduced to curb the number of consumers filing bankruptcy.

It has also affected the manner in which you file Chapter 7 bankruptcy. Chapter 7 bankruptcy is also referred to as straight and liquidation bankruptcy. According to the new federal bankruptcy laws that were introduced on October 17th 2005, if you are planning to file bankruptcy, you have to undergo a Means test.

1. Means test
The Means test decides whether you are eligible for Chapter 7 and the test has been introduced to help consumers qualify that are in genuine need to file Chapter 7 bankruptcy. In Means test your income is compared to the median income of a similar household in the state in which you reside. If it is found that your income is higher than the state median income, you don’t qualify for Chapter 7 bankruptcy. Under such circumstances, your bankruptcy attorney may suggest you to file Chapter 13 bankruptcy in which you are required to pay back your debts as per a new repayment plan.

When you file Chapter 7 bankruptcy, your non exempt assets are liquidated or sold to pay off your creditors. A court appointed trustee takes care of the entire proceeding. There are 2 types of exemptions. They are state as well as federal exemptions. You can enjoy only one type of exemption either state or federal.

2. Credit counseling
As per the new federal bankruptcy laws, you will also be required to attend credit counseling sessions. This is applicable to both Chapter 7 as well as Chapter 13 bankruptcy. Credit counseling has to be availed by credit counselor approved by the government.

Although bankruptcy is a debt relief option many consumers despise, it is often considered as an option that gives you a fresh financial start. And there are many lenders that regard filing bankruptcy as a responsible financial behavior since they understand that the economy is still reeling under recession.

Article Source: Justine Anderson

[Mdhaas]

Alrighty then!   

[Hoosier4life2005]

Exactly my response...

Alrighty then!   

[Bluemoon06]

Bankruptcy is for wussies.  It is state by state, but in Texas only wussies file bankruptcy.  In Texas people are sold bankruptcy as a means to save their assets from creditors.  But in Texas if you are sued and they win they are not allowed to get your homestead (which includes your house and up to 100 acres), your vehicles, your personnel effects (clothes, family heirlooms, guns, etc. and furnishings), the tools of your trade, retirement funds insurance and wage garnishments are illegal in Texas.  So what can a creditor get?  Just any cash you may have.  They can clean out your bank account.  So as long as your money is in retirement vehicles they can’t get anything.  The only thing bankruptcy does for a Texan is stop the phone calls.  If you don’t have the balls to take the on the calls then go ahead and file.  But I have yet to see an application that asks if you have filed bankruptcy in the last 7 years.  It asks if you have EVER filed bankruptcy.

I guess if you are in Rhode Island or something then bankruptcy may be a viable choice.

[sellnbama]

Another one of many reasons I like Texas.I just have to settle with being in the south though.

[Hoosier4life2005]

Bama, move to Texas with me and we can be buds.  You know you wanttt to.

[Bluemoon06]

Another one of many reasons I like Texas.I just have to settle with being in the south though.

bama, I thought you were in the south...Alabama?

[sellnbama]

Bluemoon,
I am,any further south I'm standing in water.lol

Hoosier,
Would love to,I have a good thing goin here and close to family.But if the country keeps heading downward,Texas may soon be way overcrowded.   

[Bluemoon06]

I thought you were in the south.  I tell people they don't have to move to Texas, an one of the states I suggest is Alabama where they can have a nice lifestyle also.  I am just a fan of the southern lifestyle.  I think it is how humans were meant to live…not like the northeast.  I think you should live like people not like bees.

[sellnbama]

Bluemoon,
Amen,the country would be alot better off if everyone had to live in the south for a while and financially responsible if they had to run a business.

[Hoosier4life2005]

Whats different about "southern lifestyle" as opposed to like.. the Northeast?

I hear alot of people, when talking to somebody whos from the South... "Your from the South, and I like that."

[sellnbama]

Hoosier,
Mainly the people in the south are so nice and will do anything to help each other out.Did you read my peice on I'm from mississippi the lowest income state but number 1 in charitable donations?You should've seen the way people helped each other after katrina,,,then you had New Orleans(a corrupt blue city)standing there with their hands out waiting on super govt to fix it.Come down for a few weeks Hoosier,,you'll see.I can't speak for them all, but I have family up north and made several trips and most people there are pricks concerned with only themselves.I was well ready to get back here.

[justin0419]

I may have to re-think that southern hospitality thing after spending all morning at the DMV for my driver's license and concealed weapons permit...

Seriously though - people are generally pretty friendly in the south.  I can compare here to Seattle since I've lived there for a few years too.  Bunch of freaks and pricks there.  There's always good and bad wherever you go, but if you want to stereotype a place I'd have to say the south is generally friendlier.

[sellnbama]

Justin,
I feel your pain on the DMV wait,it used to be all day here,sometimes even into the next day.We elected a woman who's slogan was "10 minute tags" and I went there to get mine and it was exactly 12minutes.I did spend 4hours getting my gun permit though,perhaps they need a woman to come clean house there too.I'll still take the south 100 to 1 over the north. 

[justin0419]

My problem wasn't so much the wait.  Rather it was the circus of events I had to complete in a couple hours before they quit doing the permits.  I tried to do my homework and asked a couple months ago what was required for the permit.  I got told I had to bring my mil ID and show up between 8:30-11:30 on Tues. morning.  No mention of switching my DL to MS, or the passport photo, or the multiple other forms of ID, etc. 
And what is it about DMVs hiring the crankiest old witches they can find?  Thought I was gonna strangle someone in there this morning.  I've run into this in a couple states now.  I smell a trend...