Bankruptcy laws have undergone significant modifications. However, it is uncertain how the administrators and attorneys will interpret it. There is a great deal of uncertainty surrounding these alterations to bankruptcy law. The process of bankruptcy is now significantly more expensive for debtors, and the court system is more complex. The debtors must overcome additional obstacles before declaring bankruptcy.
Previously, there was no requirement for a means test. Now, similar to the Michigan and Ohio bankruptcy laws, an individual must pass a means test. The means test determines bankruptcy filing eligibility.
Changes to bankruptcy law have increased the time between chapter 7 discharges by two years. Chapter 13 remains unchanged, whereas chapter 11 has been made more complex and expensive.
Changes to the bankruptcy laws have made it less certain that a debtor will receive immediate protection. The automatic stay has been hedged and conditioned for various conditions. Certain documents, such as driver's licenses and professional licenses, can be seized even if a stay order has been issued. Even with the stay notice, landlords can evict tenants. Those creditors who are removed from the list of creditors are free to continue their recovery rampage.
Debts are currently made less dischargeable. More obligations are now non-dischargeable under chapter 7. Loans for education and student support are now dischargeable.
The new law contains and implements certain responsibilities. These responsibilities apply to both the attorneys and the debtors. If they fail to pay such fees in a timely manner, their cases will be dismissed and the automatic stay protection will be of no use. In the bankruptcy-law changes, cases of errors, misfortunes, and carelessness are considered more seriously. The court and trustees are now more restricted and governed by the law. The previous notion that the law provides debtors with relief has been replaced by the presumption that the law presumes debtors to be abusive until they prove otherwise.
The bankruptcy law changes are novel, and their effectiveness will be determined in the future.
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