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2005 Changes in Bankruptcy Law

Bankruptcy lawyers are fully aware of the changes that have happened to both chapter 7 and 13 federal bankruptcy law since 2005 code changes, but the average person using old information from the library to file may not be so lucky. The main difference to the law is that chapter 7 bankruptcy is now harder to file. States with personal income tax like Colorado make it harder to file without the help of a Denver bankruptcy attorney.

People with high incomes are now no longer eligible for to file for chapter 7 bankruptcy. Those with high incomes might have to file a hybrid that repays some debts with chapter 13. All applicants must now apply for credit counseling in addition to budget counseling like before. The new rules encourage those with high incomes to repay their debts instead of choosing liquidation through chapter 7.

Under the new laws, anyone with a median income above their state average must pass another hurdle before they can file for chapter 7. This hurdle is called the means test, where the court decides if you have enough disposable income after debts to make chapter 13 payments every month. You and your Denver bankruptcy lawyer will go over your income and see if there is enough left after subtracting expenses and debts. Most citizens choose chapter 7 if there is any possibility of not meeting these requirements.

A means test calculator is available from most bankruptcy lawyers. Let’s say you are a Denver HVAC company in serious debt but with enough income to meet secured payments without going under. In this case you would probably have to file for chapter 13 protection. Credit counseling agencies approved by the federal government can be found through your court appointed trustee, or at

The counseling is another step where the court tries to see if bankruptcy is really necessary in your case. Even if the current state of affairs is obviously impossible, counseling is still required… but you do not have to follow the plan they set in place. The agency’s plan will have to be submitted to the court however.

After bankruptcy is filed, you must attend another session on budgeting and finance management. This is the last step before the court wipes out approved debts.

The main effect of the changes is that attorney fees and time and effort involved in bankruptcy has increased. Some lawyers are switching from injury and motorcycle law to bankruptcy because of the increased workload. One more change to chapter 13 law is that expenses are calculated from IRS allowable expenses, instead of just total expenses.

Top 5 Criteria to Choose a Bankruptcy Lawyer

When individuals cannot afford to pay off large debts, it becomes necessary to use Bankruptcy Lawyer services. Financially misfortunate people should know that bankruptcy and bad debts is not the end of the world. The right bankruptcy attorneys are specially trained to assist those who have declared themselves unable to pay any of their ballooned debts.

1. Even though filing of bankruptcy will not always suit a debtor, it may still be valuable to get tips from a bankruptcy attorney. Creditors are in the business to recover owed money with the use of various methods. Sometimes they may use intimidating collection methods in the form of letters or phone calls that will never stop until every last cent has been paid. The process of declaring bankruptcy can protect people from threatening creditors.

2. The bankruptcy process is not simple. Apart from the long, boring paperwork, the bankruptcy process can become worse in court. A number of proceedings are necessary that will increase the usefulness of a bankruptcy lawyer.

3. Bankruptcy law can seem very confusing for people who do not understand the law or have never stepped foot in court. Those people should avoid representing themselves in court and hire attorneys with the right expertise and experience in the area of bankruptcy. Preferably, these attorneys should have a good track record in their field.

4. The bankruptcy lawyer should work against the occurrence of home repossession, foreclosure, and wage garnishment. An attorney can work to clear away debts by developing a payment plan or liquidating assets. All of these choices will have a large effect on financial status. Clients are allowed to discuss the nature of the cases all they want with their lawyers.

5. Bankruptcy is a complex issue but not every lawyer can manage the evolving procedures in this field. A company that deals with bankruptcy cases will exceed expectations in assisting clients who need to achieve the best results. Clients will receive the best service if a well-qualified attorney is there to help them every step of the way.

Some law firms that specialize in bankruptcy are different from the others. In addition to being confident and committed to the highest quality service, the most effective Colorado bankruptcy attorneys firms will prove that they care and will protect their clients under the law. During the first consultation, these lawyers will describe every aspect of the bankruptcy process and allow plenty of input from clients so they get what they want in the end.

Hence it is always advised to exercise caution while choosing bankruptcy lawyers.