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Write a 2 page essay on Bankruptcy: A Legal Way Out.Download file to see previous pages... Anyone who has overextended their debts causing a struggle to pay their creditors may file bankruptcy. Debtor
Write a 2 page essay on Bankruptcy: A Legal Way Out.
Download file to see previous pages...Anyone who has overextended their debts causing a struggle to pay their creditors may file bankruptcy. Debtors usually file bankruptcy when they have overextended their credit and are unable to pay both their debts and living expenses or the debtor has undue hardship like loss of employment or unexpected medical expenses. New laws have provided some limitations to this in order to prevent abuse of the system. All debtors who wish to file bankruptcy must receive credit counseling under the new law. The debtor must have also filed their tax return from the previous year and provide proof of income in order to determine the best bankruptcy plan. If the debtor fails to meet this requirement, the courts then dismiss the bankruptcy. Debtors who want to file chapter 7 bankruptcy must meet the requirements of a "means test". The "means test" requires the debtors' income over the past six months must be less that the median income in the debtors' place of residence. If the debtor meets this requirement then chapter 7 bankruptcy can be filed. If the requirement is not meet, then the debtor must file chapter 13 bankruptcy. Chapter 13 bankruptcy is a reorganization of debt in order for the debtor to repay all or a portion of the debt over a three-year period.
