Bankruptcy: What Happens?

Most people that go into a Chapter 7 bankruptcy are concerned with whether or not they will lose their home as a result.

The short answer is that it depends on the amount of equity one has in his or her house and the type of bankruptcy filed.

As of October 17, 2005, the bankruptcy laws changed. The new law has given both debtors and attorneys more responsibilities and tasks to complete in relation to the filing of a bankruptcy. Now a debtor is required to complete a credit counseling course prior to filing his or her bankruptcy petition. Also, a debt management course must be completed by the debtor prior to discharge being granted. Additionally, the new law requires the attorney to perform a "means test" to determine which Chapter a debtor is qualified to file. For instance, if the debtor falls above the state median (as determined by the State), he or she may be forced to file a Chapter 13 rather than a Chapter 7. Please remember, each situation is unique. Please contact our offices to discuss how changes in the law may affect your situation.

Please remember that bankruptcy cases differ from each other. For answers to your specific questions, please contact our office.

If you would like to get more information on bankruptcy law, the following sites may be of interest:

• The American Bankruptcy Institute
• Bankruptcy Info
• Internet Bankruptcy Library
• U.S. Supreme Court Bankruptcy Decisions

One should always enter into bankruptcy only after careful thought and consideration. It is a very big step that can effect your credit for up to ten years. We recommend trying every other option before filing. For more information on what you can do outside of bankruptcy, contact the National Foundation for Consumer Credit.

The information set forth above constitutes general answers to certain questions pertaining to bankruptcy law and is not intended or designed to replace the advice of an attorney after a careful review of the individual facts of your case. Please read our site wide legal disclosure.