It seems that more and more people are struggling to pay their bills these days. Bankruptcy is one option that you should consider if your situation is severe enough. However, many people are under the impression that they can no longer file for bankruptcy due to recent changes in bankruptcy law.

There certainly have been some changes, but they were not necessarily as severe as many people think.

In case you’re wondering, the new law that everyone is talking about is named the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. (Try to say that three times fast.) The bottom line is that this makes the process of filing bankruptcy more complex, but few people have been made ineligible by the new law.

One of the main components of the new code is known as the means test. This test was designed to help determine whether you really need bankruptcy based on your income and expenses. If you have a relatively low income when compared to others in your state, then the bankruptcy means test will not be necessary in your case.

Those with a higher income will have to do more paperwork and go through some additional steps to show that they cannot afford to continue without bankruptcy.

The goal of a means test is to make sure that people who make more money are not taking the easy way out by declaring bankruptcy. Other changes include mandatory credit counseling and financial management courses. Essentially, Congress, along with your creditors, wants you to do your best to prevent any financial disasters in the future.

You also must make your federal income tax returns available to your creditors if they desire it. Again, the goal is to prove that you’re unable to pay your bills with your current income while being able to put food on table.

One very real downside of the new laws is the possibility of higher lawyer fees because of the extra work involved. If this happens in your situation, be sure to write your congressman and yell appropriately. In the meantime, visit a bankruptcy lawyer for more information to help determine what the best course of action is for you.