The new bankruptcy laws and how they affect you.
Your options in filing bankruptcy as a homeowner.
has been over a year since the new, tougher federal bankruptcy laws took effect. In
that space of time, personal bankruptcy cases have shrunk and the consumers must
clear more financial hurdles than ever to get a financial fresh start from
Despite the slowdown, more and more homeowners will face a difficult choice
when their finances are upended by mortgage resets on their adjustable-rate-mortgage debt. Many homeowners
with short term interest-only or pay option arms could see their mortgage
payments more than double when the loan terms recast. You need to know your
options when the threat of
Mortgage interest rate resets will rise on over one trillion dollars of
adjustable-rate mortgages in 2007, a figure that is projected to increase to
over $2 trillion in each of the next two years.
the market slows, it is expected that real estate related issues are going
to put a substantial strain on the bankruptcy system. As a homeowner you
need to know about the latest changes in the
law and how they affect you.
Under the new law, a 'Means test' is used to determine whether someone could
extinguish all debt by filing Chapter 7 liquidation.
Under a Chapter 7 bankruptcy, a liquidation takes place; a court-appointed
trustee distributes assets among creditors. Some property is exempt, and not
all debts can be discharged. Under Chapter 13, a
debt-repayment plan for individuals who earn more than their state's median
income will agree to make periodic payments to creditors over a 3 to 5-year
The new law also requires borrowers to undergo get credit counseling and
provide more substantially more documentation, increased the legal fees and
other costs involved in filing personal bankruptcy.
the law was reformed to help counter fraud in the system and force scofflaws
to pay on their bills, the law also can also harm cash-strapped people in
financial ruin caused by housing costs, health problems or job loss.
homeowner who may be contemplating a bankruptcy,
bankruptcy-101.com can help you explore all the
alternatives available to you before you make
a decision. Utilize our extensive resources,
filing links and
helpful hints to make the decision to file bankruptcy that much easier.