Recovering From Bankruptcy
A personal bankruptcy constitutes a legal process which provides the legal right to a debtor to not have to pay a part or the whole of the amount of money they owe a creditor. The current bankruptcy code was formally enacted in the US in 1978 and amendments were made to it in 2005. The main aim of this enactment is to save persons who, for some reason or the other, have gotten themselves into serious debt and can no longer can afford to repay it.
The two types of personal bankruptcy currently available are Chapter 7 and Chapter 13.
Do you have a chance of getting another credit?
There’s no doubt that banks and other credit institutions nowadays know how to collaborate and minimize their risk or exposure to individuals whom they offer credit to, who might not have the best outlook on repaying that loan. The very people who are more likely to default on a loan and file for personal bankruptcy.
Haven said that, oftentimes, after your bankruptcy has been finalized, and after a certain period have passed, you might now be able to have access to a new credit card and other lines of credit, provided you have a steady source of income. This credit card represents the commencement of the reinstatement of your credit. And in just a few years’ time, you’ll start receiving credit from the banks again., especially for bigger items such as a house or a car
What happens to the creditors?
Only a small group of individuals will learn of your bankruptcy filing. This file becomes part of public record, and your documents concerning the filing would all be kept by the credit bureau for about 10 years.
Are there any changes in the bankruptcy law?
The “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” was approved by the senate house in spring of 2005 and took effect on October 17th, 2005. The act’s main purpose was to make sure that those with a specific amount of income are made to make little contributions towards the payments of their debts, rather than trying to get it written off.
Some of the changes that were enacted were: a research is conducted to assess the ability or inability of the debtor to pay back their debts. Some of the questions that might be tackled include: are the earnings of the entire family above the particular state average? If it so happens that their income is higher than the state’s national average, is that income good enough to cover the debt?
If you happen to be a debtor and you are considering filing for bankruptcy, there really is no problem with that. However, before you file for a bankruptcy, you must be aware that you must be able to provide the latest tax returns to either the national or state government. In the even that you need you need several state exceptions, you can get one by submitting the necessary application. However, it’s not always that simple. In order to have access to a state exceptions you have to be a resident who has lived in the said state for over two years, as well as meet other requirements.
There’s also access to counselling. If it is an urgent matter, and someone needs a counseling service, then the person in question would have to provide a complete credit counselling that is approved by the federal authorities and clearly shows that they are obliged by law to accept such a counselling for over six months before the said date of the case