Moms View Message Board: General Discussion: Archive May 2006:
I am trying to find out what the new laws are that were passed last year for filing. Doe sanyone know where I can go to look that stuff over. Rich needs to file and I thought I read that when you file now you still have to pay everything off but I was just told my someone that if you make less that a certain amount of money a year you are considered poverty and you do not pay everything off just some. Help ladies.
Tonya, I'm not sure of any laws, but I would take this very seriously into consideration before the wedding. Have you thought of all options to pay the debt? This will impact your credit too after you are married. Not trying to be nosey, but just wanted you to be aware.
If you do a search for New Bankruptcy Law you'll get a lot of hits about it.
I'm not sure of each of the laws. but you shoudl be able to go to your city's court website and look up bankruptcy laws. I have heard both of the things that you have heard, as well as you dont' have to pay if your a certain income level but you have to attend finincial training.
You have to go through debt counseling, and if your income is over a certain level, you have to enter into a plan to pay X amount every month for, I think, 3 years. And, bankruptcy doesn't get rid of tax liens or child support debts. Another thing to consider, is Rich's name on the deed to your house? I don't know if they take household income into consideration when the court decides where the income level is. I strongly urge, however, that you not get married until this is sorted out. Rich will definitely need a lawyer in order to file for bankruptcy, and the lawyer will probably want to be paid up front in cash. The lawyer can advise whether getting married any time during the time the bankruptcy is pending or before Rich is "discharged" from bankruptcy (i.e., the whole thing is done and over) would mess things up.
Ditto Ginny and well put. Bankruptcy is serious business and with you planning to get married, I would definitely see how that will impact you as an individual. Hope you get the answers you're looking for.
This site is a wonderful resource:
You can make your own post and there are a lot of knowledgeable people on that board that can answer a lot of your questions. Good luck!
Here's a brief Consumer Reports article before the new laws were passed:
Here's a copy of the law, at Cornell's Law School site:
Here's a fairly complete description of the new rules, including the 6 months of credit counseling requirement, income limits, etc. I strongly urge both you and Rich to read this article.
Know that Rich can expect a lawyer to charge between $2,000 and $3,000 for handling a bankruptcy filing, and believe me, you cannot do it without a lawyer. And, the credit counseling has to be paid for - if you can find an approved non-profit credit counseling agency. The IRS is moving, right now, to remove the tax exempt (i.e., non-profit) status of many credit counseling agencies whose "counseling" and "assistance" was, essentially, no help at all and profit-making. There are legitimate, non-profit, helpful counseling agencies out there, but they are going to be hard to find and probably have waiting lists.
I filed for bankruptcy 6 months after I got married. Filed in my name only. It hasn't affected my DH's credit at all.
It cost me about $800 to go through the process. It was pretty painless.
It's definitely a big decision. Exhaust all other resources before deciding to file
I agree, Anon, it used to be a lot easier, and I also agree that it is definitely a really big decision and one should exhaust all other resources first. We (my then husband and I) went through bankruptcy many, many years ago - about 35, as I recall. And, aside from the embarassment and having to answer questions from the Judge in the hearing, it was relatively painless.
But the new bankruptcy laws have changed things drastically, from everything I've read. And I read legal journals that we get at my office and check in with CLS (Community Legal Services) postings and other free legal services. It is a lot harder to get through, with a lot more requirements and, from everything I am reading, a lot more expensive.
The new law was pushed really hard by credit-granting entities - credit card companies and banks - because they claimed too many people were using bankruptcy as an "easy way out". But from what I've read in the last couple of years, something like a third to half of all personal bankruptcies are filed by individuals and couples who have experienced a major disaster - job loss, huge medical expenses not covered or not sufficiently covered by insurance, or something similar. I just wish the credit card companies would be more careful about issuing cards / granting credit in the first place. My son has used his dog's name with his last name when he's signed on at some web sites or other places, and the dog gets credit card offers about twice a year. Not to mention my annoyance when mortgage companies send letters to my son (who presently lives in my house) offering him an opportunity to refinance the mortgage on *my* house.
One thing to think about: My brother who is a joke with finances (God love him) filed for bankruptcy before marrying his second wife about 3 years ago. As a result (and this is one "something" to think about as the spouse/future spouse), now his wife is the ONLY one with credit that can get any credit. EVERYTHING is in her name because he can't get any loans, etc. the mortgage, the cc's, the cars, you name it. And let me tell you she does not have the kind of job where she should be taking on all of that in any way, shape or form. I know he's my brother, but if he left her, he'd be free and clear and she'd be nailed with debt.
Just a thought that you might have to take over more than your fair share of financial responsibility as a result of bankruptcy.