Declaring Bankruptcy Process
In general, declare bankruptcy should be considered as a last resort for debt because the results are lasting and far-reaching. The Law on Bankruptcy Abuse Prevention and Consumer Protection Act established stricter rules for consumers and lawyers.
The process of declaring bankruptcy is now more difficult for debtors:
- Debtors must file more documents, including detailed statements of monthly net income, proof of income (pay stubs) for the past 60 days and tax returns last year.
- To pay off debts, debtors must receive credit counseling before filing bankruptcy and after an educational course.
- Debtors facing higher fees for filing bankruptcy, plus the charges for credit counseling and educational course.
- The request and the bankruptcy process is more complicated, so it is very difficult to declare it without the help of a lawyer.
The process of declaring bankruptcy is now more difficult for attorneys:
- The signature of an attorney in an application certifies that counsel has conducted a reasonable investigation of the circumstances that gave rise to the request.
- Attorneys must carefully review documents such as tax returns and pay stubs, as well as requesting credit reports to customers.
- The attorneys may be sanctioned if they make mistakes in the process.
[...] This project comes in response to this situation, a little more complicated than for years, so we must tighten their belts and clean up the family finances in anticipation of more complicated situations, “according to Valera argued. The current situation shows that household debt grew by 177% between 1998 and 2005, and the Bank of Spain has warned that household debt has surpassed 82% of Spanish GDP. It has produced a report UCE legal debt consolidation so that the person can be located perfectly in your rights and what are the obligations of companies. But according to James ‘not enough’ for what they “call for the urgent elaboration of a law regulating the debt overhang and risk of families ‘economic crisis’. [...]