West Palm Beach Bankruptcy Lawyer

What you should know before filing for Bankruptcy

With the current economy—gas prices rising, home values falling, and fear of inflation—more and more Americans are falling into a financial crisis. As a result, bankruptcy filings are on the rise. While most Americans understand that bankruptcy is usually a last resort decision, many have been met with unnerving surprises due to the fact that they haven't familiarized themselves with the current requirements to qualify for bankruptcy. For this reason, it is important to inform yourself before making such a critical decision.

Under the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, there are many new requirements for filers, which in turn makes it much more difficult to file for Chapter 7 (liquidation) rather than Chapter 13 (repayment). For example, applicants are required to undergo credit counseling and take a personal financial management course before filing. These measures have been put in place to help applicants understand financial management and responsibility at a deeper level. Sometimes applicants realize that they may not need to file for bankruptcy after all, or that there may be other forms of negotiation that is beneficial for their specific situation.

Applicants may also be referred to Chapter 13 in the event that they do not qualify for Chapter 7, in which case a “means test” is administered in order to determine its viability. Of course, within these substructures, are varying local- and state-level laws that affect how bankruptcy negotiations are executed. Given the complexity, it is beneficial to contact a bankruptcy lawyer in your area for further advice.