Starting Spring 2005, the new bankruptcy law went into effect. The new law was intended to make the process of bankruptcy more difficult. Two steps were added. One step requires a person filing bankruptcy to attend an approved Credit Counseling Course within six months before the debtor completes the filing process. The course is set up through a bankruptcy attorney.

The second added step says the debtor must attend and complete an approved Financial Management Course before the debt discharge can proceed. The attorney can also set up this appointment. In many states the courses can even be taken on the Web.

Additionally the new law requires a test on a person's finances for approval in bankruptcy proceedings. Three tests will evaluate personal income. The tests will check a debtor's eligibility for bankruptcy and help provide the debtor's income proof. The debtor must provide a copy of a tax return or transcript of a tax return for the most recent filing period. There are several other changes that came with the new law and a bankruptcy attorney can provide specific details on these.

Years ago the thought of going bankrupt was a devastating experience but as credit became more available and medical bills began to grow, more and more people found themselves having more debt then they could handle. Bankruptcy laws were originally developed to help people get out from under their debt burden and for most people it was a viable of way of starting over with a new lease on their financial life.

Bowing to the credit companies, the federal government has established new bankruptcy law that still helps most people get back on their feet while providing protection against abuse of the system by a small segment of debtors. Under the new rules a person must prove that they have no choice but to file for bankruptcy protection and failing that, will be responsible for their debt.

No longer can a person pile up debt and then use bankruptcy to wipe it out. Under the new bankruptcy law they must show they do not have the financial means of paying off their debt. They must also attend counseling sessions to learn how to better budget their income to keep them from falling into the same trap again.

Persons who have lost their jobs or have amassed unforgiving medical expenses can still find protection against creditors by filing for bankruptcy. The procedure under the new bankruptcy law is a little more complicated and there are a few more forms but overall, the protection meant for the consumer are still available for any in need.

Our financial obligations will always catch up with us wherever we may be. It doesn't matter if you are living in one of those plush high rise buildings or in one of those cabins in a windy and dusty area, you will eventually have to deal with all your creditors and the worst thing that could happen at this point is for you to be too deep in debts that you cannot possible crawl out of the financial rut that you have created.