Important aspects of Bankruptcy Law that you should be aware of before filing for bankruptcy.

Bankruptcy law is being constantly updated, and each time the courts review the situation, they succeed in recognizing and closing another loophole. Lawyers acting for individuals and companies who have declared bankruptcy, either chapter seven or chapter thirteen, have to protect the interest of their clients against the courts and their creditors. However the courts have come up with some new variations which make it very hard to skip around a simple fact. The fact is that the responsibility of courts regarding bankruptcy law is to protect the debtor from their creditors as well as protecting the creditors against any illegal act that will disallow the creditors from receiving as high a percentage of the funds owed to them.

Nowadays every personal bankrupt has to undergo a form of means test.  Anyone undergoing this test under bankruptcy law must declare all forms of income as well as all personal expenses, which must be agreed by the court. There are strict criteria set out, that are not particularly generous. Any balance between earnings and expenses must be passed on to the creditors. Continue reading »