On Monday October 17, the way you file for bankruptcy will change.
Vivian Gentry, a credit counselor, says: "In order to file for Chapter 7, there are more qualifications you'll have to meet in order to file that instead of Chapter 13, which is the debtors repayment plan."
Gentry says people wishing to file Chapter 7 will have to meet requirements under a means test.
She says: "In Kentucky the median income in the state for a family is the mid 50s range, so anyone who has a family income above that amount will not qualify for Chapter 7, unless they are extra circumstances that will qualify them to do that."
If your income is above the median for your status (number of people in household) you'll have to file Chapter 13.
Gentry says under Chapter 13, they will have to re-pay a part or maybe all of what they owe depending on how much they owe over a period of three to five years.
Anyone wishing to file for bankruptcy will be required to under-go credit counseling.
Gentry says: "You have had within the previous 180 days you've had to have met with a credit counselor, who will go through and see what your debt is and that sort of thing."
You will also have to take financial classes before you can be discharged from bankruptcy.
Gentry says while filing for bankruptcy may seem like a long-term solution, it could be a quick fix. She says: "It's going to stop the pain immediately, but in the long run it's going to create some more issues that you aren't thinking about at the moment."
Gentry says the key is to educate yourself before making a decision that can affect your future.
For more information log onto: http://bankruptcy.findlaw.com/new-bankruptcy-law