Bankruptcy Info

Learn more about bankruptcy

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which opens a new era in the history of bankruptcy law and practice, was passed by Congress and signed into law by President Bush on April 20, 2005. The new law was implemented and took effect on October 17, 2005.

The following are some of the major changes put into effect by BAPCPA of 2005:

• Means Test – to determine eligibility for the various bankruptcy chapters.
  
  
• Credit Counseling – a briefing that must be completed before you file.
  
  
• Debtor Education – a course that must be completed before your case is discharged.
  
  
• Due Diligence – A "reasonable investigation" conducted by your attorney of the information you provide.
  
  

You may consider Bankruptcy under the following conditions:

• You have done everything you can to deal with your debts but you still cannot afford to pay them.
  
  
• You have so much credit card debt relative to your income that despite not charging, your debt continues to grow.
  
  
• You are about to lose your home or your car.
  
  
• A creditor is about to levy against your bank account, seize your property, or garnish your wages and you will suffer a significant financial hardship as a result.
  
  
• You are about to lose your utility service.
  
  

Bankruptcy & How It Works

Filing for bankruptcy may give you immediate relief from the collections actions of your creditors, because in most cases you will be granted an automatic stay. The automatic stay requires by law that they stop trying to collect the money that you owe them.

Therefore the automatic stay gives you a little extra time to devise a plan to deal with your debts without having to worry that your creditors are going to create more problems for you.

Bankruptcy is a complicated legal process governed by federal laws as well as some state regulations; therefore, it is difficult to file for bankruptcy without the help of an experienced bankruptcy attorney.

The attorney will share with you his expert knowledge of the ins and outs of the law and the workings of the bankruptcy court in your area - information that will help you fully benefit from filing. The attorney can also help you decide what kind of bankruptcy you should file, either chapter 7 or chapter 13, and will make sure that you take advantage of all the property exemptions you are entitled to (for example, you may be able to choose between your state’s exemptions and the federal exemptions) so that you can hold on to as many of your assets as possible.