New bankruptcy laws, which took effect in 2005, have made the process of filing for bankruptcy a more arduous task, for attorneys and their clients. The documentation that is required when filing for bankruptcy has increased. For example, the debtor must provide additional information that details all income and expenses. In cases where the expenses exceed the IRS allowance, a special circumstances document must be submitted which reasons the necessity of the extra expense incurred. A statement of accuracy must also be submitted, along with these special circumstance documents.
In a bid to decrease the number of people filing bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing the bankruptcy petition. This counseling would orient clients to other options that are available to them. Such a counseling session will ensure that people do not make an uninformed decision to file for bankruptcy.
The effects of the new law are such that it would require attorneys to specialize in bankruptcy. These are complex rules, and a new level of commitment towards the protection of bankruptcy clients is mandated by it. It would seem from here on lawyers would be harder to find, because of the kind of complications that have been introduced under the new law. Furthermore, all other debt relief alternatives should be explored before one decides on personal bankruptcy as the way to go.
The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.
Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?
