Some of the Changes Brought About by the New Bankruptcy Law
The new bankruptcy law has provisions that make it harder for the people in debt to file bankruptcy. It is almost certain that it will also cost more. You probably won't lose any sleep over people who abused bankruptcy, but there are people who lose jobs or have uninsured medical expenses who the new law hurts.
In addition to the new credit counseling requirement for all filers and the means test for chapter 7, there are other changes in the bankruptcy laws. Most of the changes will cost you money one way or the other. You are required to do credit counseling within six months of filing your bankruptcy petition. You are also required to attend money management classes at your expense before your debts are discharged. There are new residency requirements. Under the old bankruptcy law, the amount of equity in your house protected from creditors was set by the state where you filed. In Florida, your home would have been exempt no matter how long you lived there. Under the new bankruptcy law, if you live in a state for less than two years and it has a better exemption than where you lived previously, you can't use the more favorable exemption. If you have been moving around, the exemption of the state where you lived most of the time before the two-year period is used. It gets more complicated. If you bought your house less than 40 months (that's three and a quarter years) before filing bankruptcy, or violated securities laws, or have been found guilty of certain criminal conduct, you can only exempt up to $125,000 regardless of a state's exemption. If any of the requirements of the new law confuse you and you decide you need a bankruptcy lawyer, it's going to cost you more. Under the new law, if information provided in your case is found to be inaccurate, the lawyer is subject to various fines and fees. It will be more difficult to find an attorney willing to handle your bankruptcy because of the liability and the time and effort it takes to verify all your information. If you can find an attorney willing to take your bankruptcy case, it is going to cost you more because of the time and effort it takes the attorney to verify your information. If you do find an attorney willing to file, it will cost you a lot more. The president of the American Bankruptcy Institute has reported that some attorneys say they may increase their fees by 75 to 100 percent. See 'Further Changes Brought About by the New Bankruptcy Law' for information on Chapter 13 disposable income and changes regarding personal property.
It is clear from the changes mentioned here that it's going to be more difficult and costlier to file bankruptcy no matter what chapter you use to file. There may eventually be some modifications in the law if it becomes evident it is causing more problems than it solves.
In addition to the new credit counseling requirement for all filers and the means test for chapter 7, there are other changes in the bankruptcy laws. Most of the changes will cost you money one way or the other. You are required to do credit counseling within six months of filing your bankruptcy petition. You are also required to attend money management classes at your expense before your debts are discharged. There are new residency requirements. Under the old bankruptcy law, the amount of equity in your house protected from creditors was set by the state where you filed. In Florida, your home would have been exempt no matter how long you lived there. Under the new bankruptcy law, if you live in a state for less than two years and it has a better exemption than where you lived previously, you can't use the more favorable exemption. If you have been moving around, the exemption of the state where you lived most of the time before the two-year period is used. It gets more complicated. If you bought your house less than 40 months (that's three and a quarter years) before filing bankruptcy, or violated securities laws, or have been found guilty of certain criminal conduct, you can only exempt up to $125,000 regardless of a state's exemption. If any of the requirements of the new law confuse you and you decide you need a bankruptcy lawyer, it's going to cost you more. Under the new law, if information provided in your case is found to be inaccurate, the lawyer is subject to various fines and fees. It will be more difficult to find an attorney willing to handle your bankruptcy because of the liability and the time and effort it takes to verify all your information. If you can find an attorney willing to take your bankruptcy case, it is going to cost you more because of the time and effort it takes the attorney to verify your information. If you do find an attorney willing to file, it will cost you a lot more. The president of the American Bankruptcy Institute has reported that some attorneys say they may increase their fees by 75 to 100 percent. See 'Further Changes Brought About by the New Bankruptcy Law' for information on Chapter 13 disposable income and changes regarding personal property.
It is clear from the changes mentioned here that it's going to be more difficult and costlier to file bankruptcy no matter what chapter you use to file. There may eventually be some modifications in the law if it becomes evident it is causing more problems than it solves.
posted by mileslancaster | 7:23 PM
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