As a means of debt relief, many people register for bankruptcy during economic downturns. So the government stepped in to verify the legitimacy of all filings, and a new bankruptcy law was enacted to prevent abuse of the right to file. In addition, the new law helps both consumers and businesses practice proper debt management and prevents future occurrences of the same severe debt problem.
It was as if traffic officers were investigating why a particular intersection had so many accidents. Since they have no influence over drivers, they alter the intersection's signs and signals to prevent further accidents. The same situation occurred during the creation of the new bankruptcy law. The government examined the existing law to determine which portion was susceptible to abuse and modified that portion to make it more effective. Changes have been made to ensure that those who register for bankruptcy are truly in need.
The new bankruptcy law specifies the minimum income and eligibility requirements for individuals and businesses. It stipulates that those who petition for bankruptcy must undergo credit counseling before filing. Thus, they will be educated on how to better manage their finances in order to get back on track, and they will be encouraged to refrain from abusing their credit. In situations where bankruptcy is caused by uncontrollable events, credit counseling is still beneficial because it teaches the individual or business owner how to avoid bankruptcy in the future.
The income threshold and the requirement for credit counseling were the two most notable changes in the new bankruptcy law, but many other provisions were also altered. Only legal counselors and attorneys are aware of these changes, so those who intend to file should first consult with a qualified counselor or attorney in order to better comprehend the new law. They should not rely solely on those who have filed tax returns in the past, as they may be unaware of the changes.
Those in dire straits should consult with an attorney who is familiar with the new bankruptcy law. Most attorneys offer free consultations so that clients can determine if they are eligible to file for bankruptcy and which Chapter is best suited for their particular case. They will even know whether or not filing is their best option. If so, the attorney will recommend the next action until the individual or business achieves the necessary financial recovery.""
" - https://www.affordablecebu.com/