Alterations Made By The New Laws
Within three months of filing for bankruptcy, you must complete credit counseling courses in accordance with the new laws.
In addition, applicants must take a """"means test"""" to determine if their income disqualifies them from filing.
Your credit card billing statements must accurately reflect the length of time required to pay off the balance with minimum payments.
Under the previous regulations, individuals filing for bankruptcy had the option of choosing between Chapter 7 liquidation and Chapter 13 repayment. According to the new law, those who earn more than a certain threshold cannot file for Chapter 7 bankruptcy.
The new laws impose additional requirements on attorneys, the most significant of which is that the attorney must directly attest to the accuracy of his client's information. In turn, this causes lawyers to spend more time on bankruptcy cases, resulting in increased expenses that are passed on to the client in the form of higher fees.
In order to qualify for state exemptions in the state in which you reside, you must have lived there for at least two years.
Child support and alimony payments take precedence under the new laws.
What Exactly Is The ""Means Test""?
The """"means test"""" is a requirement of the new bankruptcy law that must be completed in order to petition for Chapter 7 bankruptcy. If your current monthly income is less than or equal to the median income for a household of your size, you must satisfy the """"means test"""" to qualify for Chapter 7 bankruptcy. The primary purpose of the """"means test"""" is to determine whether you have sufficient disposable income to make payments on a Chapter 13 payment plan after meeting your allotted expenses and debt payments. According to the new bankruptcy laws, if your remaining monthly income after deducting allowable expenses and debt payments is below a certain threshold, you are eligible to file under Chapter 7.
If you intend to file for bankruptcy, erasing your obligations may not be as simple as it once was due to significant changes brought about by the new bankruptcy laws.
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