There has been a lot of talk about the new bankruptcy law that was passed by Congress in 2005. What exactly were the changes, and how will they affect your eligibility for bankruptcy?
The idea behind the recent bankruptcy law was to limit the abuse of the system. The new statute is supposed to help determine whether people really need to declare chapter 7, even though many lawyers and consumers disagree. Regardless of what you think about this new statute, you have to get used to it (at least until you convince your congressman to change it).
So what does the new bankruptcy law mean to you? For one thing, you’ll be required to attend credit counseling classes within 180 days before filing personal bankruptcy. You may be able to do this online or over the phone instead of attending a live class. You’ll have to produce a certificate that proves your attendance, but you may be able to get an extension from the court if you were not able to take it before filing a petition.
You have to make your tax return available to any creditor who asks for it, and you also have to get your pay stubs together for the last 60 days before you filed Chapter 7. After your successful Chapter 7 case, you’ll also have to attend the financial management class to help ensure that you do not repeat your mistakes and end up in bankruptcy court sometime in the future.
Will you still be eligible for Chapter 7? Well, one lawyer estimates that only 3% or so of people that would have been eligible previously will no longer be able to file Chapter 7. In other words, most people will still be eligible, even though they may have to go through additional hurdles.
Specifically, if your salary is greater than the median salary for your state, you will have to take a more involved test to determine whether you can afford to pay some of your debt. If you fail this test, you may be forced to declare Chapter 13 which involves a partial repayment plan.
For more information please visit: http://www.floridalawattorney.com
