The deadline is approaching. On October 17, the new bankruptcy law comes into effect. If you are considering filing for Chapter 7, you had best beat the deadline. Not that I am a proponent of bankruptcy filing, but according to a leading bankruptcy attorney most who file have undergone tramatic life events like divorce, job loss, or major illness. If you need to file, it is best to beat the deadline.
The new law brings costly new requirements. People will be required to seek credit counseling before they can file. The counseling will be at their expense. People will also have to complete required classes before receiving the bankruptcy discharge. There is some sort of means testing which calculates and tests for elligibility. If it turns out you do not qualify, you may have to pay creditors back. Auditors will visit your property and verify your assests. The total cost to file Chapter 7 after October 17 is estimated to be between $1500 and $2000. How is someone who cannot pay their bills supposed to come up with that amount of money.....put it on a card?
This is all the more reason to make sure you spend less than you make and have something set aside for emergencies. If you live pay check to pay check with no cushion, an emergency could push you over the edge. In today's world of corporate downsizing and lack of company loyalty to the long term empoyee, job loss could easily happen, and without warning. Many people have not only lost their job, but their pension as well.
Many couples have difficulty discussing financial matters much less agreeing to a plan. They argue so they avoid the discussion. This is a mistake. If you fail to plan, you plan to fail. If you and your spouse have difficulty discussing and agreeing on financial matters, find a coach or a planner and buffer your discussion with the wisdom of the impartial third party. If you are single, have a financial plan. Get help making one if you need it. In this case, ignorance is not bliss.
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