How To Claim Bankruptcy Post 2005
One should always first consider alternatives to bankruptcy.
Credit counselling is now compulsory under the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, and must be taken within 180 days of filing bankruptcy.
This counselling is intended to make the individual aware of alternatives to filing for bankruptcy.
There are a number of bankruptcy types (called “chapters”), but Chapters 7 and 13 are the most common.
Chapter 7 bankruptcy involves the selling of almost all of one’s personal posessions, but despite this, it is the most popular option.
With the exception of certain debt, tax bills for example, any debt outstanding after liquidation of assets is cancelled and the debtor is no longer liable for it.
Chapter 13 does not require the liquidation of all personal assets. It works differently in that a repayment plan is put in place to repay all creditors over a 3 to 5 year period.
To ensure that an applicant is being truthful regarding ability to pay their creditors, the 2005 legislation requires a means test to be completed to demonstrate that repayment is not possible, and that chapter 7 is the only viable option.
Given the complexities of filing for bankruptcy, including deciding the best type of bankruptcy to apply for and filling in the initial legal means test, a lawyer is essential.
“Automatic Stay” is automatically introduced, meaning that any creditors have to deal with your lawyer and may no longer approach you directly for payment of any monies owed to them, once a lawyer is appointed.
You will be required to draw up a list of debtors and a list of your assets. These will be reviewed at the meeting of creditors (what’s called a”341 Meeting”). where you have to answer a series of questions on oath.
Chapter 7 bankruptcy results in a clean financial slate, as any outstanding debt after your assets have been sold and the monies appropriated, is cancelled.
The situation is different in a chapter 13 filing, in that a 3-5 year repayment plan is introduced to pay off all your creditors, based on the result of your means test.
Under chapter 13, the notice of discharge is served 30-60 days after the repayment plan has been completed and fulfilled. Under chapter 7, creditors can legally challenge the discharge on the 60th day after the meeting of Creditors. If no representations are made, notice of discharge is issued a few days later.
If you are considering how to claim bankruptcy, I recommend that you visit www.howtoclaimbankruptcy.net for more free information, including advice on how to restore your credit score after bankruptcy has been completed. You can get a unique content version of this article from the Uber Article Directory.
Related posts:
- Chapter Seven Bankruptcy Laws Post 2005
- How To Claim Bankruptcy – Beware
- Some Facts Regarding Chapter 13 Bankruptcy
- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy – Reasons To File
- The Means Test For Chapter 7
- Filing San Bernardino Bankruptcy Case: How Chapter 7 Filing Can Benefit You
- Chapter 13 Bankruptcy
- How To Deal With Bankruptcy – You Need To Know The Laws And How This Will Affect You For Years
- Bankruptcy Chapter 7 Exemptions – Why is it important