Bankruptcy Laws Get Tougher - More Expensive
If you've been thinking about filing for bankruptcy, your best bet might be to file now. A new bankruptcy law takes effect in November that will make it harder and more expensive for most families to file for bankruptcy and discharge their debts. The major result of the new law is that fewer people will be able to file for Chapter 7 Bankruptcy and will be forced to file for Chapter 13 Bankruptcy, instead. A Chapter 13 bankruptcy is basically a reorganization bankruptcy. Under Chapter 13, you must file a plan with the court showing how you will pay off your debts over a period of three to five years. Once both you and your creditors agree on the repayment plan and the bankruptcy court approves it, both you and your creditors are bound by it. Beginning in November, if you want to file for a Chapter 7 bankruptcy, there will be a qualifying test. Under this two-part test, you will first be required to apply a formula that exempts certain expenses such as food, rent, etc., to see if you can afford to pay 25 percent of your "non-priority unsecured debt" (credit cards, medical bills and the like). Second, your income will be compared to your state's median income. If your income is above your state's median income, and if you can afford to pay 25 percent of your unsecured debt, you will not be allowed to file for a Chapter 7 Bankruptcy. You may be able to file for a Chapter 7 Bankruptcy if your income falls below your state's median income but you can pay 25 percent of your unsecured debt. However, if the court believes you would be abusing the system by filing a Chapter 7, you can be required to file for a Chapter 13 Bankruptcy, instead. If you file a Chapter 7 Bankruptcy today, the court will determine what you can afford to pay based on what you and the court determines are reasonable and necessary living expenses. Under the new law, the court is required to apply living standards that are derived by the Internal Revenue Service to determine what is reasonable to pay for rent, food, etc., and how much you should then have left over to pay your debts. The IRS regulations are more stringent and if you want to contest them, you will need to ask for a hearing in front of the bankruptcy judge. This can easily mean more time and expense. When you declare bankruptcy today, your state may allow you to keep all or much of the equity you have in your home. However, the new law places tougher restrictions on this exemption. So before you file, be sure to discuss this with a knowledgeable bankruptcy attorney so that you will know exactly how much of your home's equity you can expect to protect. Here's another tough restriction. Under the new bankruptcy law, you must meet with a credit counselor in the six months before you apply for bankruptcy. You must also attend money management courses ? at your expense ? before your debts are discharged. Understand that it takes a couple of weeks to file for bankruptcy. This means that if you want to take advantage of the current law, you should plan on filing at least by the beginning of September of this year. For FREE help with debt and credit, subscribe today to Douglas Hanna's free email newsletter "8 Simple Steps to Debt Relief" at http://www.all-in-one-info.com.
Related News
|
 |
|
|
RELATED ARTICLES
Learning the Basics of Handling Money
With prices increasing all the time, saving money can be harder and harder to do. Here are some solutions for saving a little so that you can still meet your needs and still find ways to trim off a little for the future.
Tips To Save Money At The Supermarket
Are you interested in saving money off your grocery bills? If so, then a few "Smart Shopper" tips are all you need to start saving hundreds off your grocery bills!
Avoiding A Nightmare On Renovation Street
You've decided you want a bigger, better and more desirable house. How do you determine when to renovate, what to do and importantly, how much will it cost and will we get our money back?
How to Attain Your Dreams on a Single Income
If you recently became a single parent and see your dreams being washed away because you feel all alone, you aren't alone. There are single parents that face future endeavors alone like dating again, living on one income, and buying the home they've always imagined. It is possible to do things on your own, be successful, and enjoy every bit of getting to where you want to be in life.
Bank On It: Places to Hide and Invest Money
Today I passed a thermometer at a bank that read 110 degrees, but I am not telling you that to show you how hot it was. I am telling you that because this bank really needs to fix their thermometer. According to their thermometer, it was also 110 degrees in December. There are a lot of people, places and things that can be more accurate with the weather, and as I've never said (but have always wanted to), "Whatever I trust with the weather is what I also trust with my money." Here are some examples:
10 Tips To Save Money When Dining Out
Here are some tips that can help you save money when dining out. Keep in mind that these tips are intended to help you save money when dining out at a restaurant type setting. In other words, these tips will not be related to fast food establishments for their food is already priced reasonably.
Introduction to Australian Superannuation
Australians, in general, constitute some of the worst savers in
the world. Current estimates suggest that, on average, Australians
save just 4% of their income. This is less than half of the 11%
estimate for Australians in the late 1970s.
The Joys of Address Labels
Address labels are many things to many different people. If you are a huge fan of address labels, you aren't alone. If you are not a fan, you simply haven't yet realized the many benefits address labels carry. Address labels are quite simply a quick and efficient tool for creating a more convenient life.
Debt Management ? Watch Out for Bank Fees!
During the last twenty years, banks have offered a number of improvements in the area of being customer-friendly. The old 9 AM ? 2 PM "banker's hours" are gone, replaced by a schedule that makes it easy for most people to visit when the bank is open. Automatic teller machines are ubiquitous, making it easier to obtain cash even when the banks are closed. And the debit card has made it easier than ever to pay for an item ? you don't even have to write a check anymore. Such conveniences come with a price, however, and banks are charging additional fees for all sorts of services. Some of them can be quite steep, and consumers should watch how they manage the money they have in the bank.
Benefits of Personal Finance Software
In this age of information, keeping track of your finances does not mean an archaic jumble of ledgers, calculators, and papers filled with calculations in chicken scratch. Now everything can be taken care of on your computer through personal finance software.
Personal Finance ? Why You Should Compare, not Despair
Sorting out your personal finances can be a tricky and exasperating time. Whether you are looking to obtain money through a loan, protect your finances with life insurance, medical, travel or car insurance, save some money through an individual savings account (ISA), apply for a credit card or a mortgage, change a telephone or fuel utility supplier, or simply decide what the best current account is for your needs, the choices are seemingly endless as well as being extremely complicated. They can also be potentially serious if you get it wrong. With so many options, and so many companies trying to get you to use their product, it is difficult to know where to turn.
Personal Finance - Have Consumers Had a Belly Full of Personal Debt?
For months, we were trigger-swipe happy, putting our groceries, clothes, holidays and service charges on our credit cards. We wanted mortgages, we took out loans, we watched Property Ladder and What Not To Wear. Whether you were born middle class, had middle class aspirations, you became middle class through your spending. Debt united people around the UK, we sympathised with each other on what we couldn't afford ? but it didn't matter, we still bought it. Soon everybody had a bottle of Jacob's Creek in their kitchen and olives and humous in the fridge.
Are You Sick of the Financial Insecurity of Fluctuating Seasons and Income?
Finding a stable and secure income that will come year in, year out, no matter what happens on the farm, will give you real peace of mind. By investing off farm, you are not only providing a secure income now, but also preparing for retirement. This IS attainable by all levels of income earners and people of all ages.
Dramatically Improve Your Stock Trading Success
Get Access to Realistic profitable strategies & discover the mindset to dramatically improve trading success.
Know Thy Finances
The first step to financial success lies in knowing your financial situation at any given time. There is an anecdote attributed to John D. Rockefeller--that as a child he was given a monthly allowance from his parents, but upon stipulation that he had to save 10% of it, give away 10% to charity, and account for the rest of it. While his parents required that he record down to the penny where he spent it--you can be a bit more lenient on yourself!
A Fresh Start for Family Finances in 2005
While 40% to 50% of us make New Year's resolutions on January 1-a ritual that has existed since ancient times-approximately 60% to 80% of us have already broken them by the end of February, according to researchers.
Budgeting: A Tough Love Way to Handle Your Household Budget
Developing and living by a household budget is by far the best way to get your expenses under control which, in turn, can mean a much less stressful life.
Budgeting -- The Critical Flaw That Causes Most Budgets to Fail
Budgeting. It's a word we're all familiar with. Everyone knows what a budget is, right? Yet how many of us actually make and stick to a solid monthly budget? The truth is that most of us start out with the best of intentions, but an unexpected expense comes up and busts our budget. Then we give up and go back to juggling our finances and worrying about having too much month left at the end of the money. However, if you are striving to create a budget for the purpose of systematically paying off your debts, or to start a savings and investment program, then it's critical to develop a workable and realistic budget.
If All Things Are Possible, Why Cant I Balance My Checkbook?
For me, the most terrible time of each month is the day our bank statement comes. We commonly call it BSS (Bank Statement Syndrome). I don't know why it is, but I have trouble getting the parsonage checkbook to balance with the monthly bank statement.
10 Money-Saving Tips
1. If you have your haircut every 3 weeks, try
going 4 or 5 weeks in between haircuts. If you
pay $10 for a haircut, you could save $70 a year
by having a cut every 5 weeks instead of 3.
|
