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Bankruptcy After the Law Change --
Putting the Bankruptcy Changes in Perspective

It is true that the bankruptcy changes coming up in October will change many aspects of bankruptcy. However, it is not true that the bankruptcy changes are eliminating Chapter 7 relief for most people. The director of the American Bankruptcy Institute estimated that the new bankruptcy changes will adversely affect a mere 2-3% of all debtors. This means that up to 98% of all debtors attempting to file for Chapter 7 bankruptcy will remain eligible to file even under the new laws.

How the changes will affect you

You may wonder how the law changes will impact you. Ultimately, you will have to take a few extra steps in order to file for bankruptcy. These extra measures include completing a credit counseling session prior to filing for bankruptcy. This counseling session could take the form of a simple thirty-minute phone call to a credit counseling agency and some agencies offer on-line counseling sessions. You may have already spoken with credit counselors before deciding on bankruptcy anyway.

The second additional step required under the new law is that you will need to attend a financial management course after you file, but before you are discharged. You will only have to do this if the Trustee's office approves agencies to provide the course, or offers the course itself. As of today (9/29/05) the Trustee has not approved any agencies to offer this service.

Finally, you will also need to provide more documents to your attorney to file for bankruptcy. These additional documents might have to be made available to creditors under the new legislation. Keep in mind that you can easily obtain these additional documents yourself or with the help of your attorney.

Chapter 13 will provide relief from debt

In the worst-case-scenario, the new means test will force some people (2-3% as reported by the ABI director as cited above) to file a Chapter 13 bankruptcy. Certainly, it would be desirable to be able to choose your bankruptcy yourself. However, a Chapter 13 bankruptcy simply requires you to pay back your debts on a payment plan that you can afford. Typically a Chapter 13 plan can still save you thousands and thousands of dollars over struggling to pay debts outside of bankruptcy.

You can still file for bankruptcy

The new law simply requires more steps. Having an experienced Legal Helpers attorney in your corner to guide you can make all the difference.

If you would like to discuss your unique situation with a bankruptcy attorney, give us a call at 800-260-1402 or fill out our free legal evaluation form and an experienced attorney will review your options with you.

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