Today I saw this information posted on a really good bankruptcy blog from a North Carolina attorney. She really seems to know her stuff. I would like to share her article with you, it addresses bad information that people have heard regarding personal bankruptcy and the changes in the law that occurred back in 2005. Many people were so scared by the change in the law that they won't even consider bankruptcy, or they think there is no way that they can do it now. Please read below, it's very interesting.
Here are some of the rumors that have been heard:
"You can't file bankruptcy anymore."
NO. Bankruptcy is still available! Some people will be not able to file Chapter 7, but many people will still qualify. The requirements will be more burdensome for both Chapters 7 and 13, but you may still find protection in the bankruptcy laws. Do not assume that it won't help ... talk to an attorney and find out if it will help you.
"You don't "QUALIFY" for bankruptcy if you make more than a certain amount ." (Or, you can't file bankruptcy if you make less than a certain amount.)
There is no magic threshold or dollar amount that you make that automatically qualifies, or disqualifies you from filing for bankruptcy. Each case is different and different types of bankruptcies help in different situations. Talk to an experienced and knowledgeable attorney about your problems to see if help is available.
I have had people contact me who have been told (by creditors, counselors and even attorneys) that they didn't "qualify" for Chapter 7 bankruptcy just because they make over a certain amount of money. This is not true, on it's own. If you make above a certain amount, then your income and expenses are subject to a formula test (the "means test") to see if you can afford to make payments in Chapter 13. You may be unable to file Chapter 7, but there are exceptions to the formula . You need to be sure that you have a good attorney because they will know what the exceptions are, or at least how to have the formula applied in the best light possible for you.
"You have to see a credit counselor before you can see an attorney."
NO. You always have the right to speak to an attorney. An attorney will explain the laws to you, and if you decide bankruptcy is the right way for you to go, make sure you attend the required counseling courses given by a federally approved counseling program.
"I heard that the new law says you have to go into credit counseling for six months before you can file bankruptcy."
NO. This is untrue. You have to get a certificate of completion of an approved bankruptcy credit counseling course within six months of filing a bankruptcy case. The course is available on the internet, by phone and probably in person sometime in the future as these courses [hopefully] are improved. Your bankruptcy attorney will make sure you have the correct information and go to an approved agency if you decide to that bankruptcy is the right choice for you.
"Now that there is a new law, if you file bankruptcy you can't borrow money for 7 years."
NO. Your credit rating and credit report can reflect your bankruptcy case for up to 10 years, however, anyone who wants to loan you money is allowed to do so. It shocks me when my clients say they are getting offers for credit cards within months of filing (and this isn't always a good thing to do.) There is nothing in the new law to stop lenders from continuing this practice of offering debt.
If you are thinking about filing Chapter 7 or Chapter 13 personal bankruptcy, please call or e-mail us today. We are Maryland Bankruptcy lawyers with more than 30 years of combined experience. We make the process simple, easy and affordable.