Recent changes in U.S. law made declaring bankruptcy a much more complicated matter. Chapter 7 is the most common form of bankruptcy requested by debtors and does not require repayment. However, the U.S. Trustee has become much more aggressive in denying Chapter 7 bankruptcy, and instead forcing people into a Chapter 13 bankruptcy that does require repayment. Today you need much more from your law firm to get your Chapter 7 petition approved.

Under the new regulations, the government requirements to obtain a Chapter 7 bankruptcy are:

# Obtaining a Special Edition Credit Report of your obligations

# Transfers of your accounts to collection agencies

# Third-party assignees and if any judgments have been obtained against you

# Obtaining a copy of your IRS Tax Transcripts

# The Pre-Filing Credit Class

# Performance and certification of the Financial Means Test

# Preparation and filing of your petition

# Payment of all court filing fess;

# Representation at court hearings (as known as the Meeting of Creditors)

# A copy of your official filed bankruptcy petition

# And the Post-Filing Credit Class.

Arguably the most difficult and the most critical part of the Chapter 7 process is the new “means test.” The means test compares the debtor’s income in the six months before the filing of the bankruptcy to their state’s median income. If the debtor’s income falls below the state median, they are automatically allowed to file for bankruptcy under Chapter 7. If the debtor’s income is above their state’s median income, they may still qualify to file for Chapter 7, but it becomes more complicated process with additional tests that take their expenses and excess income into account.

Another crucial step in getting your Chapter 7 bankruptcy petition approved is the “341 creditors meeting.” The meeting takes place one to three months after the bankruptcy petition is filed, the 341 creditors meeting takes place, which allows creditors the chance to gain additional information about the debtor’s finances and ability to repay his debt. While you are not required to have a bankruptcy attorney, it is important to make sure you are prepared properly for the meeting.

Considering both the new and the old requirements, it may be in the best interests of a debtor to hire a law firm that has both bankruptcy lawyers and a professional accountant.

Now, how to avoid bankruptcy? Find out how millions of others are becoming DEBT FREE while avoiding BK. Here you’ll find a brief summary of the worthwhile options on avoiding bankruptcy, saving your credit, and accomplishing financial freedom.

You already know that life after bankruptcy would be the same or worse than before filing for bankruptcy, so we’ve compiled everything you need to know on how to avoid bankruptcy altogether.

How to Avoid Bankruptcy – Your Top Choices:

1) Find a Debt Management Solution Enrolling in a solid debt management solution that is very successful can truly help you avoid bankruptcy. Although, there are only a few types. Bank sponsored programs like Debt Consolidation or Consumer Credit Counseling are no better than filing bankruptcy. Debt Negotiation or Debt Settlement should only be used to settle medical, utility, or other non banking type bills. Debt Termination or Debt Cancellation has recently become the #1 proven way to wipe out your unsecured bank loans or credit card debt.

2) Get a Debt Consolidation Loan Most American’s choose this option to avoid BK first if they are still current on existing loans, or are just about to get behind. Most of the time the option is exhausted before anyone even considers alternatives to bankruptcy.

3) Limit Borrowing and Reduce Debt This is a great option to avoid bankruptcy. Of course it’s easier said then done, and that’s most likely why you’re here.

4) Ask Friends & Family for Debt Help Borrowing at zero interest from friends or family if possible is one way to get debt help. Selling off your assets, or bartering something you have or can trade for debt relief to avoid bankruptcy is another option.

5) Get FREE Government Money While this seems to be a highly searched term on the web and sounds very patriotic, it is highly unlikely that Uncle Sam will be giving out Free Government Money that doesn’t need to be repaid, and if he were, we probably wouldn’t receive it in time to save ourselves in the moment.

6) You Can Get Out of Credit Card Debt The number one way how to avoid bankruptcy is to eliminate credit card debt and most other unsecured debt. We know it may sound easier said then done. It is now, in fact, easier to do than you could ever imagine.

How to Avoid Bankruptcy – Banks Do Not Lend Their Own Money

The truth is, banks and finance companies do not lend you any of their own, their depositor’s, or investor’s money.

Once you learn the truth, we know you will be astonished. And no matter what, you will learn how to avoid bankruptcy for the rest of your life, we’re sure that’s worth knowing.

Nowadays, a lot of people are going through bankruptcy as a result of present state of economy. Whereas it is true that bankruptcy just isn’t something that folks would normally need to cope with, it’s also surprising that there are people who really suppose declaring bankrupt might be the quickest option to deal with their monetary problems. Reality to be told, whereas all of the credit card debts and other money owed are wiped off by declaring bankrupt, there are undoubtedly serious implications that you simply won’t be aware of.

To begin with, the greatest impact of bankruptcy on an individual is normally not coming from the monetary side, but rather in the form of a psychological fall out. Aside from feeling ineffective and incompetent, one will really feel totally stripped of his self esteem. Based on surveys performed recently on those who have declared bankrupt, it has been reported that they can’t even walk with their heads held high as they are filled with embarrassments with themselves. They really feel as if they’re the garbage of the society.

Moreover, one has to understand that your financial future will probably be seriously affected by the declaration of bankruptcy. You will definitely face an uphill battle in trying to repair your credit score. More often than not, it takes no less than 10 years before your credit score can be good again. Moreover, your possibilities of getting a mortgage after bankruptcy, be it 5 years or 10 years down the road, can also be seriously affected.

All in all, it’s best to give it an extended and hard think before deciding to go for bankruptcy, for the implications may have a really long lasting impact in your life. Not only you’ll have to face plenty of embarrassments in addition to difficulties as talked about above, your family and kids will also need to bear the blunt. After all, it’s good to understand that bankruptcy is oftentimes not the only way out as there are a number of other choices for you to get around the monetary difficulty.

The old bankruptcy rules allowed people to choose the chapter that was best for them. In this case most people chose chapter 7 which was more convenient. This allowed people to file for failure to pay their dues before going through credit counseling. However under the new law, this may not be applicable. The new law requires for one to first go through counseling on how to handle credit.

Chapter 7 bankruptcy is also known as liquidation. It allows for the debtor’s property to be sold and the proceeds to be divided amongst the creditors. However under the new rule issued to courts, this may be difficult in that the law has been changed. For one to file a petition, one must go through what has been named as the mean test. The person’s/ organization’s income has to be looked into. If it passes the median, then the law does not apply. It will only apply in case the debtor’s disposable income after some amounts of expenses have been reduced is below the state median.

Debtors should understand that there is an alternative to chapter 7 bankruptcy. The 11th and 13th ones have an option of having the debtor’s debt adjusted. This is through a code that allows debts to be reduced to a certain amount. In this case, the debtor will be in a better position to clear his debt in accordance to the disposable income that is available to him.

For this law to be effective, a petition by the debtors should be filed after the creditor(s) has/have filed theirs. They are also required to have a trustee appointed by the bank. The role of the trustee is to act on behalf of the debtor as far as settling the debts is concerned.

Bankruptcy is a situation that many people get themselves in either voluntarily or involuntarily. Depending on which chapter the case has been filed under, one can stay in this situation for not more than ten years. Chapter 13 or the salary earner chapter, allows for the debtor to continue paying even when the petition has been filed. In this case, the debtor makes a repayment plan for the creditors and files it along with the petition.

Under chapter seven or the liquidation chapter, the assets of the debtor can be sold by the trustee and the proceeds divided among the creditors who have proven claim over the assets of the debtor. In the new rule of discharge from insolvency, anyone who becomes bankrupt after the year 2004 is discharged from financial distress after one year no matter how much they owe. This can also happen if the debtor has already paid their debt way before the order had been made in court.

There are cases in which ones financial case cannot be nullified. This happens in cases where the debtor had been faced with bankruptcy before. There are other alternatives to insolvency. One of this is the individual voluntary agreement. This is a formal arrangement done in court to have the creditors restrained from pushing the debtors for payment.

This will mostly be applicable for people with large amounts of income since they will be required to make huge amounts towards recovering the debt. Another option is the fast track individual voluntary agreement in which the case is nullified. In this case, the debtor has to draw up a plan of how the debt will be paid off. In this case, the debtor will have to pay much more than they would have otherwise paid.