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by: JayAnderson
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Today you will find in the USA that there have been some major changes made in respect to the country's bankruptcy law. Therefore for all Americans today it is important that they know exactly what these changes are and what effect they may have on them should they need to file for bankruptcy at any point in the future.

Below we will take a look at what changes have been made with regard to filing for bankruptcy. But first, we are going to take a look at the types of bankruptcy that one is able to file for in America at present.

Chapter 7 - Of all the types of bankruptcy one can file for this is the most commonly used. Once a person files for Chapter 7, a trustee is appointed who will oversee the property and assets of the person who has filed for bankruptcy. If they can, they will obtain some of the person's assets in order that they can be sold off and then the money raised is used to pay back the person's creditors. Often after filing a Chapter 7, a person will discover that most of their debts will have been cancelled in their entirety, although many do not realize that not all types of debts are wiped out.

Chapter 11 - This type of bankruptcy filing is more commonly used by businesses, but can be used by individuals as well. However, often because this form of bankruptcy can prove to be expensive and complex it is not one that many people like to use. Also, the people who are most likely to file a Chapter 11 is because they have debts which are above the limits set in a Chapter 13 bankruptcy filing. However, with this particular bankruptcy a business is able to continue operating whilst actually sheltering it from some (again, not all) of its debts.

Chapter 13 - This form of bankruptcy allows you to set up a proposed repayment plan that will help you with clearing all the debts you have. This will need to be approved by a court and a trustee will be appointed by the court to collect the necessary payments from you and then distribute them to your creditors. The trustee will ensure that at all times you comply with the repayment plan that has been put in place.

Above we have explained a little bit about the kinds of bankruptcy one is able to file for in the USA today. Now we are going to take a look at the changes that have taken place recently with regard to the bankruptcy law. The first one relates to the filing for a Chapter 7 bankruptcy. Today no longer can someone whose income is above the state's recommended median be able to file a Chapter 7.

So in order to see whether a person is actually able to file for Chapter 7, they will need to under go a means test first. If it is found that their income is higher than that considered as the median for where they reside then they will need to file for Chapter 13 instead.

Also with the new bankruptcy law, all those who owe money will need to get credit counseling before they can actually file a bankruptcy case. Plus you will also need to undergo additional counseling with regards to budgeting and how to best manage your debts before they can actually be wiped out or assets liquidated.

About the Author

For more insights and additional information about Bankruptcy Law as well as getting a free no-obligation bankruptcy evaluation from a bankruptcy attorney local to you, please visit our web site at http://www.bankruptcy-data.com

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