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Bankruptcy Law - It Is Probably Not What You Assume |
By:
Jay Anderson |
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bankruptcy law - it is probably not what you assume
Jay Anderson
In the USA today there have been some dramatic changes made with regard to the country's bankruptcy law. It is therefore crucial that all Americans are aware of what these changes are and how they could affect them when and if they should need to file for bankruptcy in the future.
Below we will take a look at what changes have been made with regard to filing for bankruptcy. But first, we are going to take a look at the types of bankruptcy that one is able to file for in America at present.
Chapter 7 - This is the most common type of bankruptcy that a person is going to file for and for which a trustee is appointed. It is this person's job to oversee the person who has filed for bankruptcy and find the property and assets which may well be sold off by the trustee to help pay the person's creditors. In most cases after filing Chapter 7, a person will find that most of the debts (although not all) which they have incurred, will be cancelled.
Chapter 11 - Often Chapter 11 is used by businesses who wish to file for bankruptcy, but on occasions, some individuals may choose to use this as well. But it is very rare because Chapter 11 is extremely costly to file for and also is very complex to deal with. Plus the only people who are likely to use this form of bankruptcy filing are those as individuals whose debts are above the limits set for a Chapter 13 filing (which we look at next). But for a business who files for Chapter 11 it, means that they are still able to operate as a going concern yet are sheltered from some of its debts as well.
Chapter 13 - With this form of bankruptcy also known as "Wage-Earner Bankruptcy" a proposed repayment plan will be set up in order to clear your debts. If this is then approved by a court, a trustee is appointed and they will collect the payments from you to distribute to your creditors. It is their job to ensure that you comply with the repayment plan at all times. This does not wipe out your debts.
Above we have taken a look at the types of bankruptcy that one is able to file for in the USA today. Now let us take a look at the changes that have been made to the law governing bankruptcy. One of the most dramatic changes that has taken place relates to Chapter 7. The change in the law now prohibits anyone who has a high income from actually employing Chapter 7.
Before a person is actually able to file for Chapter 7, they will first have to undergo a means test to see what their income actually is in relation to the state's median. If it is found that their income is higher than this, then they will instead have to file a Chapter 13.
Along with the limit being set at a particular level for Chapter 7 before you can actually file for bankruptcy you need to under go credit counseling beforehand. As part of the new bankruptcy law one also will need to participate in additional counseling in relation to controlling your budget and the best way to manage the debts that you currently have before they can be cancelled.
For more insights and additional information about http://www.bankruptcy-data.com/ Bankruptcy Law as well as getting a free bankruptcy evaluation from a bankruptcy attorney local to you, please visit our web site at http://www.bankruptcy-data.com
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Article Source: http://www.statssheet.com/articles/article71274.html |
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