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ARTICLE ON BANKRUPTCY:

Legally Discharge Your Debt With Bankruptcy.

For some individuals bankruptcy may be the only option to be able to get out from under overwhelming debt. In some cases, it may be the only way to save your home, your car and other assets. New legislation has made it more difficult to obtain a full bankruptcy where all debt is eliminated with no effects other than a negative reporting on your credit report. In fact the new regulations stipulate the types and kinds of debt, which can be discharged, and in some cases the reasons.

There some things, which are not considered to be bankruptcy debt, these are usually federally issued or managed loans such as student loans. These are not cleared under bankruptcy laws and cannot be applied for when applying to have debt liquidated under chapter 7 or placed on a repayment plan such as available through chapter 13. The new requirements for both chapter 7 and chapter 13 bankruptcy filings make it more difficult to obtain a chapter 7 which is total liquidation of debt and it makes it harder for bankruptcy attorneys to file for clients. This in turn makes it more expensive and a much lengthier process to file for bankruptcy now than in previous years.

In order to be able to file chapter 7 bankruptcy you must meet a certain set of guidelines. These guidelines are that you attend credit counseling as well as personal finance and budgeting classes. These have to be from a registered provider and there must be documentation that you attended and made yourself available to the services they provide. It is also necessary that you meet income guidelines. This means that after allowable expenses are removed you do not have enough disposable income to make payments on a repayment plan. The key word in this is allowable. The government has set regulations on expenses. These regulations allow only so much of each type of expense to be deducted and it stipulates the types of expenses, which are allowable.

Chapter 7, which is total liquidation of debt, is much harder to qualify for and obtain than a chapter 13. After you have obtained credit counseling and it has been documented that you do not have the income necessary to pay off your debt. There are a few things that occur. You must present your case in court where creditors often send representatives to argue for a dismissal of a chapter 7 or to remove their debt from the list of accepted debts that were to be liquidated. It is possible for some bankruptcy debt to be presented and not be ultimately included in the decision of the court regarding your bankruptcy.