Bankruptcy Matters We Handle

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An Overview of Bankruptcy And The Changes in Federal Laws

Bankruptcy law is governed by federal and state statutes that give protections to both the debtor and the creditor. The law defines a way for debtors to get out of debt without harming their ability to lead a productive life in the future.

Federal bankruptcy laws were updated in 2005, under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which was passed to make it more difficult for individuals to file for bankruptcy. It eliminated the automatic eligibility to file for Chapter 7 bankruptcy and forces the repayment of some of an individual's debt under Chapter 13 bankruptcy. Until 2005, most personal bankruptcy cases were filed as Chapter 7 Bankruptcy because debts were discharged and did not have to be repaid. A " Means Test" was added to the law so that those with the means to pay some of their debts now must file for Chapter 13 Bankruptcy. Under Chapter 13 bankruptcy, an individual must develop a repayment schedule for debt repayment. These payments are generally made over a 3 to 5 year period. The discharge under Chapter 13 bankruptcy is not issued until the last payment has been received by the bankruptcy trustee.

Changes to the federal bankruptcy laws also created the requirement that everyone seeking bankruptcy protection must undergo credit counseling before filing for Chapter 7 or Chapter 13 bankruptcy. Those who have filed bankruptcy must also go through an additional budget and credit counseling prior to the discharging of debt. It also increased the fees and the paperwork necessary for filing.

Want to file for bankruptcy? Contact Price Law Group online or call 866-210-1722 for a free consultation.

For more information call us at 866-210-1722 or fill out the form below.

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