Free Yourself From Debt By Availing Bankruptcy Counseling


Have you been struck by overriding debt and are looking for a way out? Relieving yourself from debt first requires a thorough review of the level of debt that is pulling you down and what type of business you are in, your repayment capability and finally the type of bankruptcy you want to file. Filing Chapter 7 is the most common for individuals and businesses whereas filing chapter 13 bankruptcy will give an opportunity to the client to re-organize ones financial stature and pay off the debt on a monthly basis under the supervision of a court.

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Why File Chapter 7 Bankruptcy?

Chapter 7 bankruptcy code lets a client settle his debt situation by getting rid of it. It is the most common form of filing bankruptcy as it is very systematic and provides relief from debt. In the past people started filing for bankruptcy on a massive scale and it became difficult for creditors to handle bankruptcy claims of any and every client. But with changes in the Bankruptcy law it was made difficult for people to file for bankruptcy. The Obama administration made changes to the chapter 7 laws which allowed people burdened with too much debt to allow the bankruptcy authorities or trustee to liquidate all non-exempt assets and distribute the cash to all the creditors thus dissolving the applicant of all his debts. However, as per the new law one has to go through a means test and credit counseling process before filing for bankruptcy under chapter 7 law.

What is a means test?

The first step which an individual has to pass before filing chapter 7 is a means test. In this test all the financial details of the client will be evaluated. Financial details include monthly income, daily and necessary expenditure and once the expenditure is deducted from the total monthly income, the result decides whether the person is authorized to file for chapter 7. Only if the result is less than the median income of the State will the person be allowed to file bankruptcy, but if it is otherwise, then the court suggests filing chapter 13 bankruptcy.

Bankruptcy Counseling:

The word 'bankruptcy counseling' itself states that help is at hand. Anyone suffering from a major financial crisis is asked to approach a credit counseling agency who offer bankruptcy counseling services to the client. They review the clients financial condition including his income and expenditure and then try to find a solution for the client so that he can pay off his debts and get his life back on track. If the credit counseling agency chalk out a perfect plan for the client to pay off his debt, then the client cannot file chapter 7.

Filing Bankruptcy Online:

Because of the gradual spurt in internet usage, it makes much more sense filing bankruptcy online than traveling distances to file chapter 7 or chapter 13. Hence, filing bankruptcy online is carried out with the help of an attorney who charges for this type of service. The court also requires a specific number of forms apart from making a petition to the court. However, once cannot escape the route to the court as you will need to appear to present your case in court.


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