According to the new bankruptcy laws, individuals with higher income can no longer qualify for Chapter 7 bankruptcy. These individuals will have to repay at least a portion of the debt under Chapter 13. The new laws require all debtors to go through debt counseling before they want their debts to be wiped off. This new law has made it difficult for everyone to file bankruptcy. For many individuals, filing bankruptcy was an easy way out of a massive debt they had no plans to pay. Since the laws are stringent, finding an attorney will become a difficult task.

Restriction on eligibility: Not everyone qualifies for bankruptcy now. Earlier individuals who filed for bankruptcy could choose the one Chapter that would be best for them. However, according to the new law, individuals with high income are not allowed to file Chapter 7. Instead they have to file Chapter 13 and repay at least part of the debt.

Debt counseling: Under the new bankruptcy law, any individual (you) wanting to file bankruptcy must, at first, have completed credit counseling with an agency that is approved by the United States Trustee’s Office. This counseling will finalize whether you need to file bankruptcy or can get other repayment options open for you.

Full Article

For More Information:http://www.miamifloridarealestatelawyer.com

Significant Changes to the Bankruptcy Code under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA): The Presumption of Abuse and Qualification for Chapter 7 Discharge.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) represented the most sweeping change to the Bankruptcy Code since the modern bankruptcy code was enacted in 1978. It was roundly criticized and opposed by the bench and bar, consumer advocates, and legal commentators, but a potent lobby by creditors, led by credit card banks were able to convince the Congress to enact the significant amendments which were viewed as largely business friendly changes to the law.

Perhaps the most significant change to the bankruptcy code under BAPCPA was the “Presumption of Abuse.” Under the pre-BAPCPA bankruptcy code, debtors could file for bankruptcy under Chapter 7 liquidation or total discharge, regardless of their income level. Under the BAPCPA amendments, debtors had to prove that they qualified for Chapter 7 bankruptcy. BAPCPA creates a method to calculate a debtor’s income, and compares this figure to the median income of the debtor’s state. If the debtor’s household income falls below the median income for the state, then the debtor automatically qualifies to file for Chapter 7 bankruptcy.

If the debtor’s income is above the median income amount of the debtor’s state, the debtor is subject to a “means test.” The means test works roughly like this:

The debtor first calculates the “current monthly income” comprised of all sources of income for the household. The debtor’s current monthly income is then offset by a set of deductions specified by the Internal Revenue Service. In general, the allowable deductions applicable in the means test include:

1. Certain specified living expenses,
2. Contributions to care of nondependent family members,
3. Expenses of administering a Chapter 13 repayment plan,
4. Educational expenses up to $1,500 annually per child,
5. Home energy costs,
6. A percentage of certain secured debt,
7. Expenses “reasonably necessary health insurance, disability insurance, and health savings account expenses,”

Full Article

For More Information:http://www.miamifloridarealestatelawyer.com

Bankruptcy is probably the biggest financial decision anybody is going to make in their lives. But before you decide on anything, scrutinize your finances and cut your expenses first. When you’ve cut unnecessary expenses you might realize that you can better manage your budget and that declaring bankruptcy isn’t needed yet.

Below are a few expenses to consider to stretch your budget:

Day-to-day Doodads

Robert Kiyosaki was the one who coined the term “doodads.” This refers to all the little trinkets and whims you buy that can hurt you financially, since they do not give you any monetary returns.

Doodads can range from a pricey car in the driveway to daily coffee breaks at Starbucks. Now that’s not saying that you can never enjoy a cup of coffee, but have you seen the prices of a latte nowadays? It’s very easy to splurge hundreds of dollars in snacks a month without even noticing it.

Such expenses accumulate very fast. You don’t notice them until you realize your wallet is empty. The sad thing about this situation is that sometimes you can’t even remember where you spent the money. You must make a conscious effort to cut down on these things as little purchases can add up very fast.

Presents

Do you have the habit of giving expensive presents to make an impact on your clients? This is one habit that must be stopped if you want to keep your financial boat afloat.

Car payments

If you’re having financial problems, it would be wise to sell the new car to free up some badly needed cash. There’s nothing wrong with driving the old reliable.

Full Article

For More Information:http://www.miamifloridarealestatelawyer.com