The New Bankruptcy Law: Information you Need to Know Before you File
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The new bankruptcy law is in effect, and the climate has drastically
changed for people who are considering bankruptcy. In this article we
will touch on some of the details of the new law, and explain exactly how
these new changes will affect you.
First, let’s touch on the new counseling requirements. According to
the new law, you must complete credit counseling with an agency approved
by the United States Trustee’s office before you can file for
bankruptcy under either Chapter 13 or Chapter 7. Because this counseling is to
decide whether you need to file for bankruptcy, or if an informal
payment plan would be a better alternative for your situation. The counseling
is mandatory for everyone, even for people who know for certain that a
repayment plan is not what they want.
However, you are required only to join in the counseling; you do not
have to go with any repayment plans the agency recommends. But if you are
given a plan, you will have to present the plan to the court with a
certificate showing that you attended the counseling before you can file
for bankruptcy. Once your bankruptcy case is over, you will have to
attend another counseling session focused on learning personal financial
management skills to complete your bankruptcy and erase your debts.
Another major change that comes with the new law effects many people
who want to file chapter 7 bankruptcy. Under the old law, most people
filing could choose between Chapter 7 and Chapter 13,and most people
chose Chapter 7. Because of the new law, many filers with higher incomes
will be prohibited from using Chapter 7.
The first step in determining whether or not you can file for Chapter 7
is to compare your current monthly income to the median income for a
family of your size in the state you live in. In the context of the new
law, your current monthly income is not your income at the time you
file, but your average income over the last six months before you file.
Once you have determined your income, measure it against the median
income in your state. If your income is equal to or less than the median,
you can file for Chapter 7. If it is more than the median, you must
pass a requirement of the new law called the means test. The means test
requires you to determine your amount of “disposable income” by
subtracting different variables from your current monthly income.
If your current monthly income after subtracting these amounts is
under $100, you pass the means test, and will be able to file for Chapter
7. If you income is more than $166.66, you will be prohibited from
using Chapter 7. Those in the middle of these incomes will be able to file
for chapter 7, but will be required to still pay a percentage of their
debt.
Yet another important change caused by the new law is that lawyers may
be harder to find, and possibly more expensive. The new law has added
many complex requirements to the process of filing for bankruptcy that
will make it more time consuming for lawyers to represent their clients
in bankruptcy cases. The end result being that attorney fees for
representation will increase. Also, the amount of time that lawyers must put
into the new regulations has increased and it is likely that it may be
harder to find a lawyer that solely specialized in bankruptcy in the
future. Many experts are predicting that the stress of these new
requirements may drive some bankruptcy lawyers out of the field completely.
Now that you know many of the changes the new bankruptcy laws hold for
your situation, be aware and file with care.
Liz Roberts
http://www.articlesbase.com/finance-articles/the-new-bankruptcy-law-information-you-need-to-know-before-you-file-51523.html
SAAB’s situation right before it filed for bankruptcy?
I am trying to gather information about SAAB’s information right before it filed for bankruptcy. I want to know stuff along the lines of:
1. what was going within the organization that led to the need to file bankruptcy
2. Why were the cars themselves not selling well?
3. What was wrong with their marketing efforts?
This is actually pretty complicated but the end result was that GM had made the decision to sell Saab, and in order to do so, it was determined the easiest way was to "spin it off" as an intenty of GM, let it declare bankruptcy independently, and then emerge from bankruptcy while selling it to new owners (primiarly, to get Swedish government help in the bailout – which up to now it has been balking although recently more open to investing in the new Swedish joint venture). Swedish laws are different than the US, and it was simipler to make it an independent company then to sell it as a part of GM.
Saab has lost money every year except for one that GM has owned it. It was losing money when GM bought 50% of the company in 1990. I believe it made money for one year in 1995.
Saab has suffered without enough investment since before GM bought 50% in 1990, and worse with GM’s troubles after GM bought the whole company in 2000. If you are losing money every year, how do you develop new cars?
GM recently made the decision to freshen the line and so Saab has a new 9-5 coming out now that is reported to be a very good, competitive car. The 9-3 was freshened and is a respectable car. A new 9-4 that is essentially the same car as Cadillac’s new SRX (many of the parts are from Saab and only some are from GM powertrain – for example Cadillac is "borrowing" things such as a turbo-charged V6 and the all wheel drive system which were both developed in Sweden, not in Detroit) – so Saab will have a mostly new lineup by mid-2010.
Saab’s are selling very poorly right now due to the fear the company will go out of business, but the Swedish buyers (Koeningsburg and partners) seem very interested in keeping it going. Sales are down 60% in the USA in 2009, which is not good for any company. Marketing is not the problem, the economy and the perception of the company’s future are two huge issues.
References :
Industry reports