Bankruptcy - Totality of the Circumstances
Lately, a lot of new laws have been applied to bankruptcy - totality of the circumstances is one thing that must not be overlooked – that are causing quite a raucous.
Prior to the year 2005, many people were filing for Chapter 7 that did not really need the protection of the law. Since bankruptcy laws were set in place to protect people that could not pay debt, many often took advantage of these laws. Eventually, creditors got fed up of people filing for Chapter 7 effectively leaving a large amount of unpaid debt behind them. Thus, the government stepped in and amended certain laws to include additional rules that must be adhered to. One such rule had a lot to do with basic bankruptcy - totality of the circumstances reared its head effectively cutting back on the number of Chapter 7 filings.
Experts Your Questions Now.
Once this new term had been introduce into bankruptcy law, a lot of individuals were forced to grapple with a legal term once reserved for criminal court cases. So, what is “totality of the circumstances” exactly? Well, if you were to apply this term to a criminal case it would refer to a defendant’s rights. This term was originally conceived to protect defendants that were forced into a confession. In short, this term ensured that a defendant’s rights were not violated while a confession was gained. In order to be sure that a defendant confessed on their own, all circumstances were taken into consideration.
Interestingly, where it comes to bankruptcy - totality of the circumstances takes on a whole new meaning. Rather than protecting the individual, this legal term now seems to protect creditors. In order for a person to file Chapter 7, all parts of an individual’s income must be considered. An individual’s income will be totaled along with those expenses that are deemed “necessary.” If there is any amount of money left over after these calculations, the individual may not be able to claim Chapter 7. The question is: who is the defendant when it comes to bankruptcy…the individual or the creditor?
From A Bankruptcy Lawyer Now.
If you are about to face a court that is to decide your Chapter 7 fate, make sure that you bring a qualified bankruptcy lawyer with you. The information contained within this article is meant to provide you with background information, but it is not to be taken as legal advice.
With the right lawyer on your side, facing the new law that applies to bankruptcy - totality of the circumstances – will be a whole lot easier.