This is a question I often hear regarding the possibility of declaring bankruptcy. Can I declare bankruptcy even after the recent changes in the bankruptcy code that were passed by Congress in 2005? Yes, you can. However, there are some additional restrictions and requirements in the process you should be aware of. For example, you will have to take mandatory financial counseling in order to qualify for bankruptcy.
The reasoning behind this is that you need to be educated and informed so you don't make the same mistakes again and end up having to file for bankruptcy at some point in the future. Some people think this is a waste of time, but that's not really the point.
Whether you like it or not, you have to comply with these new regulations if you're intending to declare bankruptcy. Another big difference is what is called the means test. This test tries to determine whether you have the means to pay your debt by examining all your income and expenses.
If your salary is lower than the median salary for your state, then you don't even have to worry about going through this process. However, if your salary is higher, you will have to take the additional steps and go through this somewhat painstaking process in order to prove that you really need bankruptcy.
Some prominent bankruptcy lawyers estimate that most people who would have been eligible previously will still be able to file for bankruptcy even under the recent changes. However, the process is more involved and takes additional effort to go through. This is probably the intent of the statute, because creditors didn't want people to have easy access to bankruptcy laws.
Be sure to discuss these things with your attorney because whether you like it or not, there have been some changes that you need to keep in mind when deciding to declare personal bankruptcy.
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