However, these measures are frequently insufficient. You may be unable to find a second employment due to an illness or injury, or your debts may be insurmountable without filing for bankruptcy. If, after discussing your situation with an attorney, you determine that chapter 7 bankruptcy is your best option, you should be aware of the recent changes to these laws. What then is chapter seven bankruptcy?
In the first place, you should be aware that chapter seven bankruptcy is the most common option because it is designed to eliminate all of your debts without a repayment plan. This type of bankruptcy was the focus of the most recent bankruptcy laws. The credit industry complained that an excessive number of consumers could readily discharge their debt.
Whether or not this was the case, the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act was passed by Congress. This statute instituted the means test, which essentially requires consumers to demonstrate that they cannot afford their debts. Those who earn more than the median income in their state of domicile will be subject to the means test's more stringent requirements.
Nevertheless, the majority of people will still qualify for chapter seven bankruptcy. If they do not, they may be compelled to file for Chapter 13 bankruptcy in order to establish a repayment plan for the next three to five years. In addition, if your income is less than the state's median income, you do not need to stress about a means test.
There are additional modifications, such as the requirement to attend credit counseling classes as part of your bankruptcy case. The bottom line is that you will have to jump through some hurdles to prove that you need bankruptcy, and you will be required to take financial management courses to help you avoid a similar situation in the future.""
" - https://www.affordablecebu.com/