Among different debt options to get your finances back on track is bankruptcy, a pretty drastic measure that can sometimes do more harm than good. That explains why in many cases filing bankruptcy is considered a last resort to give a debtor a “fresh start”. However, due to the New Bankruptcy Law that went into effect October 17, 2005, declaring yourself bankrupt has become more expensive and complex than what it used to be. What’s even worse: due to this new regulation, less filers will actually be able to get a “fresh start”. Here’s a brief glossary to understand the main differences between filing under the old and the new law. Disposable Income: the money the consumer has after paying for his living expenses. Chapter 7: most of the debt is cancelled, giving the debtor a “fresh start”. A consumer’s assets (minus his exempt property) are liquidated and given to creditors. Chapter 13: the debtor is placed on a repayment plan for up to five years. Less People Will Be Able To File Under Chapter 7 This means less people will get a “fresh start” and more people will be placed on a repayment plan. The new Law specifies that if a consumer has an income higher than the median for his State, he’ll need to file under Chapter 13 instead of 7. Thus, instead of cancelling most of his debts, a debtor will be assigned to a repayment plan.
For More Information Visit: http://www.floridalawattorney.com