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When you declare bankruptcy, you are taking an official legal action — essentially saying, "I cannot repay all of my outstanding debts and want to make a fresh start." Unfortunately, a Chapter 13 bankruptcy filing will remain on your credit record for at least seven years, and Chapter 7 bankruptcy filings can stay there for 10 years. Either of these bankruptcy filing can affect both your credit score and how lenders perceive your credit worthiness.

Debt Relief Solution (AXcess News) Washington - On Monday October 17 the nation's new bankruptcy law goes into effect, which has made this last week the busiest on record for bankruptcy filings. According to data from Lundquist Consulting, for the week ending Oct. 8, bankruptcy courts reported a total of 102,863 filings, up from the previous record high of 68,387 the week before. That marked a 19.4 percent increase over the same period last year, Lundquist reports.

On March 10, 2005, the Senate passed S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. President Bush signed the bill into law, which became effective on October 17, 2005. The following summary discusses changes in the consumer bankruptcy law affected by the bill. Unless otherwise noted, all references are to the United States Bankruptcy Code (“Code”). Either directly or indirectly, the content of the new law will have a material effect on consumer debt, real property transactions and home ownership.

Debt Management Services The daily bankruptcy filings are averaging 20,000 per day for the week ending October 8. Lundquist expects that number to be even higher for the week ending October 15.

The newüct contains the biggest changes to bankruptcy law in 25 years. The law makes it more difficult for people to have their debts discharged under Chapter 7 bankruptcy, bankruptcy credit counseling. All of those people who are barred under the new law from filing Chapter 7 will be forced to file Chapter 13 bankruptcy, which requires a payment plan over a period of years instead of giving a fresh start.

Bad Credit Debt Consolidation When the new bankruptcy law goes into effect Monday it will be tougher for individuals to file chapter 7, which wipes out a person's debts giving them a fresh start. Under the new law bankruptcy filers will have to first go through credit counseling before they can file for bankruptcy, making it tougher to get out of repaying creditors. Most filers will have to file for Chapter 13 reorganization where the court determines a repayment schedule over five-years of some of the debt.

debt solution of last resort. The effects of a bankruptcy filing are felt for 10 years (as it stays on your credit report for that long) and can make it difficult, if not impossible, to rent an apartment, buy a house, receive insurance, credit and, as mentioned earlier, even a job. Cash Central ® strongly advises its cash advance Missouri customers to seek alternate means of improving credit and escaping debt before considering bankruptcy.

Credit Debt Solution Under the new law a means test must be passed before a debtor can file bankruptcy. The test is based on a formula that takes into account a number of factors, including one's average income over the past six months, the median income of the state in which a consumer files, and the debtor's expenses.

With the change in the new bankruptcy law effective October 2005, it is now necessary for consumers to get credit counseling within the six months before filing bankruptcy. The credit counseling service must be from a government approved credit and debt counseling organization. //www.usdoj. cc_approved.htm

Consolidation Counseling The new bankruptcy law means debtors who do not meet the test may be forced into a repayment schedule or denied bankruptcy filing altogether.

Credit Card Debt According to reports, many of the bankruptcy filers seeking chapter 7 now would never qualify under the new rules.

Debt Free Solution Bankruptcy filers will be required under the new law to produce more documents, such as pay stubs or income tax returns and bankruptcy attorneys will be under greater scrutiny as well, which could push fees those attorneys charge higher by as much as 100 percent.

Debt Negotiation Services Under the new law a "special circumstances" guidance is applicable, where debtors can make a case that a special circumstance forced them to file for bankruptcy. If the court agrees, the debtor is more likely to be allowed to declare a Chapter 7 bankruptcy.

Debt Solution Company Katrina survivors are being allowed to file for special circumstances under the new law despite objections by opponents of the new law who have asked Congress to at least make Katrina survivors wait one year before considering special circumstances in filing for chapter 7 bankruptcy. The U.S. Trustee, which administers the bankruptcy process and enforces bankruptcy laws under the Department of Justice, said last week that it considers the circumstances of Katrina survivors as "special circumstances" and will be exempt from credit counseling requirements under the new law.

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