Friday, March 13, 2009
NEW FEDERAL BANKRUPTCY LAW
Federal laws’ regarding bankruptcy is not like the way as it was before. It has changed a bit. Now the Federal Bankruptcy laws are more rigid for the debtors who want to take the help of bankruptcy to erase their debts. It has also become tricky for debtors to analyze it completely. So any body who want to choose bankruptcy as an option of debt elimination must require a good professional of the same field as a guide. Otherwise the person can make mistake which might lead to various intricacies in discharging debts.
Chapter 7 and Chapter 13 are the two types of personal bankruptcy laws which are available to protect a debtor. The eligibility criterion also varies as per the chapters. In Chapter 7 the primary eligibility criteria is means test where the income of a person should be equal to or less than the average income of other families of same size. If the debtor is unable to pay anything after meeting the minimum family responsibility, then Chapter 7 is ideal for him. A debtor must attend credit counseling sessions before six months of filing bankruptcy to check which Chapter is suitable for him.
The creditors are forbidden to make any legal proceedings towards any debtors after bankruptcy is filed. Which debts are to be discharged and which debts are to be paid of will be decided by the court. All the non exempt assets (can even be the home) will be taken in to consideration while paying of creditors as per new laws. In case of unsecured debts Chapter 7 is a good option. Chapter 13 can save the house of a person.That is why it is required to select the right chapter and also the current situation of the person should be considered.
Bankruptcy laws were designed to protect the interest of the debtors. But now as per new amendments interest of the creditors are also taken into consideration.
Chapter 7 and Chapter 13 are the two types of personal bankruptcy laws which are available to protect a debtor. The eligibility criterion also varies as per the chapters. In Chapter 7 the primary eligibility criteria is means test where the income of a person should be equal to or less than the average income of other families of same size. If the debtor is unable to pay anything after meeting the minimum family responsibility, then Chapter 7 is ideal for him. A debtor must attend credit counseling sessions before six months of filing bankruptcy to check which Chapter is suitable for him.
The creditors are forbidden to make any legal proceedings towards any debtors after bankruptcy is filed. Which debts are to be discharged and which debts are to be paid of will be decided by the court. All the non exempt assets (can even be the home) will be taken in to consideration while paying of creditors as per new laws. In case of unsecured debts Chapter 7 is a good option. Chapter 13 can save the house of a person.That is why it is required to select the right chapter and also the current situation of the person should be considered.
Bankruptcy laws were designed to protect the interest of the debtors. But now as per new amendments interest of the creditors are also taken into consideration.
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