However, is it truly the finest option available? Once upon a time, it was relatively simple to file for bankruptcy, and it provided you with a clear slate, as it was intended to do. You had to cope with an unattractive mark on your credit report for a number of years, but it gave you the opportunity to start from scratch with your credit.
However, recent changes to bankruptcy law make it more difficult to comprehend and determine if this is the best option for you. In contrast, Chapter 13 filings required at least partial debt repayment. With the new laws, the income threshold for filing Chapter 7 has decreased, so your income will be a determining factor in which form of bankruptcy you can file.
You must then take what is known as the means test, which allows the court to determine what you are paying, how much you earn, and how much you can afford to repay. In addition, credit counseling is now required for all bankruptcy filers, regardless of which chapter they intend to file under. Studies have shown that the majority of people who file for bankruptcy do not do so due to financial mismanagement, but rather due to unforeseen circumstances, which many argue would benefit little from a credit counseling session; however, this requirement remains part of the law.
In light of these new changes, of which only a few are enumerated here, it is imperative that you consult with an attorney prior to making a decision. Before these changes to the law, you could petition for bankruptcy on your own without much difficulty. Now, you may still file, but you may encounter obstacles and roadblocks that an attorney can help you overcome. Moreover, if you file incorrectly or fail to file a required form, you could lose even more money than necessary and be forced to start from scratch.
How then do you determine if bankruptcy is right for you? However, you must consider your debt, income, and expenses as a whole. You should take advantage of a free bankruptcy evaluation in order to ensure that everything is taken into account and that you have a realistic perspective of what you may face with bankruptcy. This should be done prior to filing for bankruptcy, as it enables you to have a clear comprehension of the decision you wish to make, as well as other options and alternatives to bankruptcy that may be available to you based on your specific circumstances.""
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