People used to say that the old bankruptcy law from 1978 was very strict, those people now would certainly be in for a shock when they see just how much stricter the all-new bankruptcy law now is.

So what are the main changes that have been made to the new bankruptcy law?

In order to make sure that only the most in need people qualify for bankruptcy, the government has created what they call the means test.

When you take the means test the government will calculate your monthly income minus a few allowed expenses. If it turns out that your monthly income is above the median income you will be obligated to file chapter 13 bankruptcy.

There are a series of strict guidelines set up by the IRS dedicated to your allowable expenses. For instance, you will be limited to 800 $ for all your housing costs each month and you will also be limited to 200 $ each month to pay for your food.

It is essential to understand that there are both state and federal bankruptcy laws. You will find that some state laws are more lenient than others.

You will be forced by the IRS to pay out around about 75 $ on a credit counseling course that you will have to attend within 180 days from the date you first file for bankruptcy.

With the new laws filing for bankruptcy has become even more paperwork driven! You will have to provide and fill out a whole load of forms in order to prove that you are worthy of bankruptcy.

Some of the things that you are going to have to provide the IRS with will include: a list of all your unsecured and secured creditors; a detailed list of your expenses and your monthly income; liabilities and assets; your most recent tax return; your photo ID and pay stubs.

There are now hefty legal fees that you will have to pay thanks to this all new bankruptcy law. This is because you will have to have a bankruptcy attorney certify that your figures are accurate.

The interpretation of the new bankruptcy law

By law you are not obligated to use the services of a bankruptcy lawyer, however it is certainly highly recommended that you do in less of course you have qualifications in this area.

The one thing that you must remember is that bankruptcy, no matter the circumstances, is always your absolute last option. If you file for bankruptcy it will stay on your public record for up to 10 years, so if you can avoid it you will be most likely better off.

You may have had to file for bankruptcy because of events that have affected your financial circumstances. Bankruptcy, however, is not the end. .

Deciding to file for bankruptcy is not easy. But many people have had to and are now able to care for their finances stably. You can dust yourself off and get back on your financial feet even after bankruptcy.

Your credit can be repaired after going through a bankruptcy. Start by paying your bills on time. If you filed for a Chapter 7 bankruptcy, your debt would have been wiped out along with some of your assets.

You must care for the assets that you have been able to retain responsibly. If you still have your home, work on proving your ability to pay for bills on time by making all of your payments to the local utility company when they are due.

Secured credit cards, credit cards that require that a deposit be made by the individual applying for the card, can also help you reestablish credit. As you use your secured card, you will build your credit and eventually be able to qualify for an unsecured card.

Stick to one credit card and avoid making regular charges on it. Keeping the card for emergencies is a good idea. Having a credit card re-establishes your credit.

Learn to pay in cash. Force yourself to refrain from making purchases without having the cash you need to pay for them. Paying in cash will also help you strengthen your bank account. This also prevents future debt problems, since bankruptcy often comes as a result of spending without having the cash necessary to do so.

Plan to succeed. Since you have already experienced bankruptcy, you know you don’t want to go through the process again. Establishing a good savings plan that includes an emergency fund will help you prevent any future need to file for bankruptcy. Credit card payments shouldn’t present any kind of problem after having had all of your debt eradicated.

When you do get a credit card again, you can expect to be bombarded with offers from credit card companies. They will do there best to get your business, but you can resist them if you are determined to stay out of debt.

Learn to live within your means. This requires that you be prepared for the unexpected. Credit counseling classes or meetings with a financial advisor can be helpful, since they will provide you with great tips on how to maximize your savings and care for your expenses responsibly.

A financial advisor can take the extra money that you put in a savings account and show you how to invest for the future. One day you will want to retire. Retirement could last as long as twenty to thirty years. Having enough money to live out that portion of your life is important. Concentrate on that part of your financial future as you wait with patience for your credit to be re-established.

Bankruptcy is not the end by any means. Recovery is possible, but only with hard work, patience, discipline, and time. If you stay with your plan, you will be able to enjoy a financially secure future.

Filing personal bankruptcy will protect you from creditors that you owe money to. Bankruptcy is a new method to gain protection. It takes away your debts so that you start off on a new note with your finances. If you are planning to file bankruptcy then there are certain things that you should keep in mind.

The very first thing that you should do is get in touch with a lawyer who specializes in bankruptcy. You’ll want to be working with someone who knows exactly what is required and what steps you need to follow for bankruptcy. When you first meet with the lawyer make sure that you take along all of your financial papers, including bills that you owe, a verification of your monthly income, and statements from your bank.

Be very clear and forthright in calculating your entire debts, minor ones included. Don’t be apprehensive if the amount you figured as a debt is too high. Both your lawyer and you need not be skeptical about the declaration. After all you are on the threshold of making a new beginning in your life.

The lawyer might brief you about the secured debt and unsecured debt. In secured debt, the creditor always keeps a back up for the money you owe him. For example he might attach your property or any asset of yours, for the money you owe him. And you might have to part with your belongings, if you are not in the position to repay your loans. However, such criterion is not present in an unsecured debt.

Some debts can’t be cleared even by filing bankruptcy. Such debts are student loans, child support and any back taxes that you owe. So double-check that your lawyer has all the information with him to make a perfect application for bankruptcy.

Once you’ve determined all your debt you’ll be filing a bankruptcy petition with the local courts in your area. Your creditors will need to be contacted and notified that you’ve filed for bankruptcy. Once you’ve filed for bankruptcy your creditors will be unable to contact you and won’t be able to collect any of the money that you owe them.

The court will assign a trustee in response to your bankruptcy case. He is liable to contact your creditors and pay their dues. All the proceedings will commence only after all your property, if you own any, is sold off and hence the funds are raised. These funds are spent on repayment of your debts. If the place you live in entitles you to receive a part of the profit made by selling off your property, you would get that. Or you might end up in receiving an allowance for a fixed period of time, in order to restart your life.

Bankruptcy is a long and a tedious process. It may affect your financial outlook for years to come. So make sure that all the papers are intact with you for the bankruptcy process.