Bankruptcy: Do You Know The New Rules?

Bankruptcy: Do You Know The New Rules?

Bankruptcy: Do You Know The New Rules?

Bankruptcy is often times looked upon as a last resort since it ruins your credit for about seven years. However, people still filed for bankruptcy since it seemed like a quick fix for getting rid of all their debt. Since the year 2005, however, new rules have been put in place concerning bankruptcy, and these new rules make bankruptcy seem a bit more unappealing.

Since the year 2005, it has been much more difficult to file for bankruptcy. Back in the day, just about anyone could file for bankruptcy, but now you have to qualify. Not only does bankruptcy still ruin your credit for about seven years, but the process now drags on much longer because of all the new rules, and bankruptcy attorneys are more expensive because the process drags on much longer.

To qualify for bankruptcy, you have to have a combined household income for less or equal to the median household income for a family your size. If your income is higher, you will be required to pass a means test. A means test is a test to see how much money you have left over after allowable expenses are subtracted. If you have enough money left over, you will be required to pay your debt, at least some of it if not all.

Depending on how much disposable money you could have if your expenses were reasonable will depend on how much of your debt you will need to pay. Under this new rule, many who file for bankruptcy may find they need to live on less in order to pay at least some of their debt. No matter what your income is, however, if you file for bankruptcy, you will be required to go to counseling to learn how to better manage your money on a budget.

Learn more about bankruptcy now!

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