Bankruptcy gives you the opportunity to have a breather to allow you to get your financial situation back under control. Once upon a time if you had serious debts you would end up in a prison, so having to face the United States bankruptcy proof of claim court is nothing in comparison to how things once were.

Bankruptcy: the absolute last resort

It is no secret that declaring bankruptcy will stay on an individual’s credit record for ten years, so naturally one considers all available options before considering bankruptcy.  United States bankruptcy proof of claim court’s rules and regulations differ from state to state.  The only state you need to worry about is the state you live in (or state of your primary residence.)   You can do this all on your own or hire a lawyer.  If you are not familiar with the United States bankruptcy proof of claim court, then it will be cheaper in the long run to hire a lawyer.  With the help of your lawyer you will have to make the decide between a Chapter seven bankruptcy (liquidation of everything you own) or a Chapter 13 (more a repayment plan).

A Proof of Claim needs to be filed within 90 days of your meetings with your main creditors (banks or credit card companies, for example).  You are called the debtor.  Whoever you owe money to is called a creditor.  They have to give you about 100 days before they have a meeting with you (called a “341 meeting”) where you officially declare bankruptcy.  The creditors have to file Proof of Claim forms, not you, with the United States bankruptcy proof of claim court.  If they don’t do this on time, they will loose any right to your financial corpse, so to speak.

Some additional things you should know

A very important thing to remember is that when declaring bankruptcy you do not want to be seen using your credit cards as this will look bad to pretty much all United States bankruptcy proof of claim courts throughout the country.

You don’t need to worry about your landlord or employer hearing about your bankruptcy unless of course you owe them money. It is required by federal law that your employer, landlord etc do not have to be notified of your bankruptcy situation. Anyone can of course look up the public records and find out about your bankruptcy proceedings, however we all know that nobody does this unless of course you were just starting out in a new job.

A considerable number of people who find themselves in this predicament were already at the bottom of the financial heap before having to file for bankruptcy and do not know how to go about their financial predicament. For these people research is a must so that they can properly understand bankruptcy and can move forward.

How does the State bankruptcy laws protect a borrower?

When someone files for bankruptcy the State bankruptcy laws make it very clear that their creditors are not allowed to contact them any more. In some cases some creditors may still attempt to contact the borrower out of negligence of the fact that he or she has already filed for bankruptcy, but for the most part the borrower should not have to worry about his or her creditors chasing them.

If creditors continue to harass a person who has filed for bankruptcy, under the State bankruptcy laws he or she can make them stop by contacting the authorities in charge of their bankruptcy. You can also get your bankruptcy attorney to deal with this issue for you.

When facing bankruptcy one should always contract the services of a bankruptcy lawyer who can follow the state bankruptcy laws to your best advantage. Nevertheless you should do some bankruptcy research so that you at least know the basics of the state bankruptcy law you are bound by.

The bankruptcy state laws have been created to protect people who find themselves with more debt than they can handle. Remember though that when someone files bankruptcy it will show on their personal records for up to 10 years to come, and we all know this never looks good. So regardless of the state bankruptcy laws where you live, make sure that bankruptcy is your absolute last option.

So what are the main changes in the new bankruptcy law?

There are several changes you need to know about that have taken place in the new bankruptcy law.

Firstly there is now such a thing as a Means Test that is applied so that you can show that you aren’t in any way abusing the use of the bankruptcy option. In this Means Test your monthly income is taken into consideration, minus a number of expenses that are allowed with in the new bankruptcy law. If you come out of the Means Test with what is considered median income you will have no choice but to file for Chapter 13 bankruptcy.

Secondly, the IRS has set up very strict guidelines for what they like to call allowable expenses. Within these allowable expenses you will be allowed $200 per month for your food and $800 per month for housing costs.

Thirdly, it is vital you understand that there are both state and federal bankruptcy laws in the USA. You will most likely find that some of your state laws are more lenient than others. Of cause, you can’t exactly shop around for the best deal. You will obviously have to be a resident in the state where you are filing for bankruptcy and by law you must be so for an absolute minimum of 2 years. So you will be stuck with what ever laws apply to your state, you can only hope they suet your interests and situation.

Fourth, you will be obligated to attend a credit-counseling course that is on the approved list of the IRS and do so within 180 days from when you file for bankruptcy. It is important to note that although this is an obligation, this is not a free course. It will cost around 75 US dollars.

Fifth, following the new bankruptcy law there is now additional paperwork that you will be obligated to fill out so as to make one hundred percent sure you are the right candidate for bankruptcy. Some of the things that you will have to give the IRS include but aren’t limited to: a full list of all your unsecured and secured creditors; absolute proof that you have indeed taken the credit counseling course; a very detailed list of all your costs and your monthly income; liabilities and assets; your most recent tax return; your photo ID and payment stubs.

Sixth, there are now a number of pretty hefty legal fees that you will have to pay all thanks to this the new bankruptcy law. This is so, since you will be obligated to have a bankruptcy attorney certify that your figures are 100 percent correct. Otherwise, it is possible that both you and your lawyer could face some pretty expensive sanctions. Be cause of all this, bankruptcy lawyers now have no choice but to perform far more investigations and general fact checking than ever before in order to ensure that your info is 100% correct.

How do we interpret the new bankruptcy law?

Even thou there is nothing in the new bankruptcy law stating you have to retain a lawyer, it would be a very wise decision to do so. Doing so will almost definitely save you a considerable amount of time since if you forget to file certain documents it is quite possible your case will be dismissed and you will have to start all from the beginning. You do certainly don’t want to go through this in an attempt to save yourself money since it will almost definitely only come back to haunt you in the end. Also you are far more likely to come out of your bankruptcy application in the best possible way for your situation with an experience lawyer since he/she will have the experience to make the best decisions for you. So, really there is no doubt, the best way to go is with a experienced bankruptcy attorney.

The new bankruptcy law as you can see is all about making it more difficult for you to file bankruptcy. But if you abide by the rules and you have a compelling case you still can file bankruptcy. Remember to always look into all your options before attempting to file for bankruptcy. If theirs one thing that hasn’t changed since the new bankruptcy law it’s that filling bankruptcy should always be your last option.