How Did the New Federal Bankruptcy Laws Affect Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is one of the mortgage debt help options that not many debtors want to opt for. However, there are many debtors that are left with no other option but to file bankruptcy. Earlier it was easy to file chapter 7 bankruptcy. With the introduction of the new federal bankruptcy laws, filing bankruptcy has become very rigid. The new federal bankruptcy laws have been introduced to curb the number of consumers filing bankruptcy.
It has also affected the manner in which you file Chapter 7 bankruptcy. Chapter 7 bankruptcy is also referred to as straight and liquidation bankruptcy. According to the new federal bankruptcy laws that were introduced on October 17th 2005, if you are planning to file bankruptcy, you have to undergo a Means test.
1. Means test
The Means test decides whether you are eligible for Chapter 7 and the test has been introduced to help consumers qualify that are in genuine need to file Chapter 7 bankruptcy. In Means test your income is compared to the median income of a similar household in the state in which you reside. If it is found that your income is higher than the state median income, you don’t qualify for Chapter 7 bankruptcy. Under such circumstances, your bankruptcy attorney may suggest you to file Chapter 13 bankruptcy in which you are required to pay back your debts as per a new repayment plan.
When you file Chapter 7 bankruptcy, your non exempt assets are liquidated or sold to pay off your creditors. A court appointed trustee takes care of the entire proceeding. There are 2 types of exemptions. They are state as well as federal exemptions. You can enjoy only one type of exemption either state or federal.
2. Credit counseling
As per the new federal bankruptcy laws, you will also be required to attend credit counseling sessions. This is applicable to both Chapter 7 as well as Chapter 13 bankruptcy. Credit counseling has to be availed by credit counselor approved by the government.
Although bankruptcy is a debt relief option many consumers despise, it is often considered as an option that gives you a fresh financial start. And there are many lenders that regard filing bankruptcy as a responsible financial behavior since they understand that the economy is still reeling under recession.
Article Source: Justine Anderson
For more information on Somerset Mortgage Lenders check out their website: http://www.somersetmortgagelenders.com
About Somerset Mortgage Lenders:
With their main offices in the heart of Long Island, located at 290 Broadhollow Rd Suite 310 E in Melville, NY 11746, Somerset Mortgage Lenders have been in the mortgage business for 30 years. In Somerset, you have a mortgage banking firm that prides itself on attaining the highest ethical and moral standards and is dedicated to providing quality mortgage products at value pricing to our customer. Somerset has a long-standing history of servicing its local community as a reliable mortgage company. Our goal is to establish a successful partnership with our customers, staff, investors, and markets that respect the interest and goals of each party. Somerset Investors Corp. has been built on the belief that to be successful in mortgage banking it must first begin by molding itself as a customer service firm that provides quality service to the public.
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SOMERSET MORTGAGE LENDERS
Specializing in: purchases, debt consolidation, divorce buyouts, loans for home improvement, mortgages, refinancing existing loans, reverse mortgages, FHA loans & more
Get a free rate quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783 to speak to a LIVE Loan Officer.
It has also affected the manner in which you file Chapter 7 bankruptcy. Chapter 7 bankruptcy is also referred to as straight and liquidation bankruptcy. According to the new federal bankruptcy laws that were introduced on October 17th 2005, if you are planning to file bankruptcy, you have to undergo a Means test.
1. Means test
The Means test decides whether you are eligible for Chapter 7 and the test has been introduced to help consumers qualify that are in genuine need to file Chapter 7 bankruptcy. In Means test your income is compared to the median income of a similar household in the state in which you reside. If it is found that your income is higher than the state median income, you don’t qualify for Chapter 7 bankruptcy. Under such circumstances, your bankruptcy attorney may suggest you to file Chapter 13 bankruptcy in which you are required to pay back your debts as per a new repayment plan.
When you file Chapter 7 bankruptcy, your non exempt assets are liquidated or sold to pay off your creditors. A court appointed trustee takes care of the entire proceeding. There are 2 types of exemptions. They are state as well as federal exemptions. You can enjoy only one type of exemption either state or federal.
2. Credit counseling
As per the new federal bankruptcy laws, you will also be required to attend credit counseling sessions. This is applicable to both Chapter 7 as well as Chapter 13 bankruptcy. Credit counseling has to be availed by credit counselor approved by the government.
Although bankruptcy is a debt relief option many consumers despise, it is often considered as an option that gives you a fresh financial start. And there are many lenders that regard filing bankruptcy as a responsible financial behavior since they understand that the economy is still reeling under recession.
Article Source: Justine Anderson
For more information on Somerset Mortgage Lenders check out their website: http://www.somersetmortgagelenders.com
About Somerset Mortgage Lenders:
With their main offices in the heart of Long Island, located at 290 Broadhollow Rd Suite 310 E in Melville, NY 11746, Somerset Mortgage Lenders have been in the mortgage business for 30 years. In Somerset, you have a mortgage banking firm that prides itself on attaining the highest ethical and moral standards and is dedicated to providing quality mortgage products at value pricing to our customer. Somerset has a long-standing history of servicing its local community as a reliable mortgage company. Our goal is to establish a successful partnership with our customers, staff, investors, and markets that respect the interest and goals of each party. Somerset Investors Corp. has been built on the belief that to be successful in mortgage banking it must first begin by molding itself as a customer service firm that provides quality service to the public.
###
SOMERSET MORTGAGE LENDERS
Specializing in: purchases, debt consolidation, divorce buyouts, loans for home improvement, mortgages, refinancing existing loans, reverse mortgages, FHA loans & more
Get a free rate quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783 to speak to a LIVE Loan Officer.
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