Home » Articles » Finance / Wealth

How New Legislation Modified Bankruptcy

How New Legislation Modified Bankruptcy
"""Deciding to declare bankruptcy is never a simple decision. Given that it can affect not only your life but also that of your family, it is crucial that you choose the appropriate form of bankruptcy at the appropriate time. As a result of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a few modifications were made to the established bankruptcy laws, and common procedure may differ slightly from what you are accustomed to. Here is a brief summary of the laws, how they have changed, and how these factors will impact you.

Proof of Income / Tax Returns Those who desire to file for Chapter 7 or Chapter 13 bankruptcy must provide proof of income in the form of tax returns from the prior year. If taxes are delinquent, bankruptcy cannot be filed until they are paid in full.

The majority of filers are required by the new laws to attend and complete a credit counseling course. Again, this must occur prior to the initial petition and be provided by a government-approved institution or instructor. Moreover, debtors are required to participate in a financial management education program. After the bankruptcy has been processed, but before the debt has been discharged, this occurs.

While the majority of one's debts may be to credit card companies or other financial institutions, child support and alimony payments are now prioritized in re-payment schedules. These creditors will be paid in full or in part before all others.

Chapter 7's Strict Eligibility: All applicants' eligibility will be determined by a ""means test."" This evaluation is founded on a formula that compares your income, debt, and expenses to the state's median income.

Less Extensive 'Automatic Stay': The scope of the automatic stay, which keeps creditors at bay as soon as your petition is filed, has been marginally reduced. The automatic stay no longer suspends or delays license suspensions, eviction actions, or active child support court proceedings.

" - https://www.affordablecebu.com/
 

Please support us in writing articles like this by sharing this post

Share this post to your Facebook, Twitter, Blog, or any social media site. In this way, we will be motivated to write articles you like.

--- NOTICE ---
If you want to use this article or any of the content of this website, please credit our website (www.affordablecebu.com) and mention the source link (URL) of the content, images, videos or other media of our website.

"How New Legislation Modified Bankruptcy" was written by Mary under the Finance / Wealth category. It has been read 105 times and generated 0 comments. The article was created on and updated on 02 June 2023.
Total comments : 0