Bankruptcy Law

The global recession has had a domino effect from the governments down to the banks and then down to the individuals, with higher unemployment and more bills than ever before, it seems. So it really is little wonder that more and more people are facing persistent difficult in making ends meet. As such, more people than ever are now considering the possibility of filing for bankruptcy. However, since the changes in bankruptcy law of 2005, many people believe they can no longer file and this simply is not the case.

Following extensive lobbying by the credit card companies, Congress passed a series of changes in bankruptcy law back in 2005. These changes have made it more difficult for people to file for bankruptcy. However, this does not mean that it is now impossible. Absolutely not.

Changes in bankruptcy law have been known as bankruptcy Abuse Prevention and Consumer Protection Acts of 2005. It's a long winded way of essentially making clear that the changes are there to prevent people taking advantage of bankruptcy to abuse finances.

However, most people who would have been eligible before 2005 still are. The biggest changes is the means test. This is a test whereby your case will be established to see whether or not you really are in a position whereby you are unable to afford to pay back your debts. If you have higher than median income from your state then you will also have to go further tests and provide detailed documentation. Essentially, this is to ensure that those who could pay back their debts without resorting to bankruptcy are unable to file as quick way out.

The increased complications in the law, however, have also meant a rise in lawyer fees! However, given the complexity of proceedings you would be well advised to get a lawyer and consider it a necessary expense.