New Federal Bankruptcy Law

In 2005 our federal government made some changes to bankruptcy law that is making it hard for some people to file like people have done in the past.  They decided to do this because there was a mutual feeling that people were beginning to not take there debts seriously anymore.  It seemed that it had become a fad to declare bankruptcy.  Individuals where beginning to tire of taking responsibility for their actions when it came to mishandling their finances.  These actions have not helped our economy anymore, quite frankly, then the banks or other financial institutions.  Therefore in 2005 the federal government made some serious changes, saying enough was enough. 

Changes to Chapter 7 and 13:

Under the new changes to our federal bankruptcy laws when you decide to declare bankruptcy you will have to essentially, compare your monthly house hold income to the median income for a household your size that your state has deemed adequate.  If you make more then the median income issued by your state then you will be responsible in paying back your debt possibly.  You will be required by law to take a test, called the "means test" to see if you will be able to file.  Essentially this test is like a budgeting system.  You will have to take your monthly income and subtract your debts from it.  If it is too low, then you can therefore go through and file for chapter seven, If it is too high, then you will not be allowed to. If you make less then the median then you can qualify to file for chapter seven bankruptcy. 

Counseling Requirements:

Since our federal government has found problems in our system with people not being able to repay their debts and not fulfilling their promises with the credit institutions and other companies that have trusted them.  They are now requiring that everyone who files for bankruptcy go through counseling services.  In these counseling services you will get to the root of the problem as to why you have gotten yourself into these financial woes.  You will be seeing a credit counselor that has been deemed to you by the state, and you will really begin to unravel how and when these problems started.  They will also discuss if there is any way to begin a repayment plan instead of going through with bankruptcy.  These counseling sessions are required, and should be taken seriously.  Bankruptcy is not something to take lightly, and unfortunately many people do.  In life you must learn responsibility and this is an important step in the right direction.  In these sessions you will also be taught how to handle your money responsibly and they will teach you better ways to budget and spend your money more wisely.  If you do not attend these classes or the counselors go back to the courts and say that you did not take this experience or time seriously, you could lose any rights to declaring bankruptcy.  This is a serious matter, which means that you must take this expierience seriously.  You need to learn that in life their are consequences to everything that you do.  Bankruptcy may seem like an easy out, but you must rmember for the next seven years your credit will be destroyed, and the bankruptcy will stayt on your credit record.  The federal government has tightened these laws for a reason, and you should take the counseling and other tools that you will be subjectred to and really begin to apply them to your life.  These changes have been made to hold individuals and companies to higher standards.  You must be able to take responsibility and begin to pay back what you owe, and learn better habits to help you out later in life. 

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