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Important Amendments to the New Bankruptcy Laws

Important Amendments to the New Bankruptcy Laws
"""It is crucial that both debtors and creditors are aware of the new bankruptcy laws; the more informed they are, the better they can defend their respective claims. The following are some of the most significant modifications that the new bankruptcy laws have made to the bankruptcy code. These modifications become effective on October 17, 2005.

Means Test

No longer is the choice of bankruptcy classification a matter of discretion. If you intend to file for bankruptcy, the bankruptcy court will require you to pass the Means Test and, based on the results of the test, will determine which form of bankruptcy is most appropriate for your particular case. If you understand precisely what the Means Test is, you can evaluate the results and make an informed choice. According to the Means Test, it is determined, based on all of your sources of income, how much money you will have left over after paying for your allowable daily necessities. If your remaining funds are less than the state's median monthly income, you qualify for Chapter 7 bankruptcy. If the quantity is significantly greater than the state's median monthly income, you will be required to file for chapter 13 bankruptcy. Before you file a court petition for bankruptcy, it is crucial that you implement the Means Test so that you can make the correct choice regarding the type of bankruptcy you should file for.

The IRS determines allowable expenses.

These are the IRS-established allowances for your necessary day-to-day expenses, not you. While performing the Means Test, you should therefore bear in mind that the food allowance is approximately $200 per month, the housing allowance is approximately $800 per month, etc. Note that even if your actual food and housing expenses exceed the specified amount, you will only be allowed to deduct that amount from your monthly income.

Credit Counseling Is Requirement

According to the new bankruptcy laws, the debtor must now utilize the services of a government-approved credit counselor. You must utilize these services within one hundred eighty days of registering for bankruptcy.

The new bankruptcy laws have complicated the bankruptcy code. Nonetheless, it is a sincere attempt to protect individuals from bankruptcy deception.""

" - https://www.affordablecebu.com/

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"Important Amendments to the New Bankruptcy Laws" was written by Mary under the Finance / Wealth category. It has been read 93 times and generated 0 comments. The article was created on and updated on 02 June 2023.
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