Welcome to Bankruptcy Guide
Free Bankruptcy Records Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Understanding the New Bankruptcy Law
from:On October 17, 2005, a new bankruptcy law went into effect. The purpose of the bankruptcy was to restore some fairness into the bankruptcy law in terms of who could qualify. Congress had become convinced that many people were taking advantage of the system under the old law in order to get out of paying debts they could afford to repay. The new law makes it more difficult to qualify for a bankruptcy, but it also places a heavier responsibility on the bankruptcy attorney.
The new bankruptcy law changed the old law in several important areas. For one thing, the new law resulted in more people qualifying for a chapter 13 filing rather than a chapter 7 filing. Under the chapter 7 filing, all of the debtor assets are liquidated and used to repay the creditors. In many cases, debtors have no assets except their house or car and so the creditor gets very little or nothing. A chapter 13 filing is a repayment plan which forces the debtor to repay as much debt as possible between 3 to 5 years.
The new bankruptcy law also established new calculation rules and made it more difficult to use the homestead exemption. The new calculation rule uses the IRS standard of living numbers to determine your net income figure. The IRS living standard amounts usually are often lower than what you actually spend. The homestead exemption refers to the fact the new law has placed greater restrictions on which state exemption you can use as determined by your length of residence. A bankruptcy attorney will carefully determine the status of your homestead exemption during the filing process.
Another addition to the new bankruptcy law is the requirement that debtors take a money management course and get 90 minutes of credit counseling. This process has been streamlined in that there are many ways to fulfill these requirements online.
One of the major changes in the new bankruptcy law is the establishment of an income means test. The means test is how the courts will determine if you should be allowed to file a chapter 7. Under the means test, your income will be compared to the state median income in the state in which you live. Then your income will also be used in a formula that will determine if you can pay at least 25% of your net income to pay off unsecured debt. If you can, and your income is over the median, then the court will probably make you file a chapter 13 unless you can prove you have unusual circumstances.
This is just a quick snapshot of the new bankruptcy law changes effective October 2005. Of course, there are many other complex aspects to the law that only an attorney is qualified to interpret. Though the new law is more stringent than the old, it still gives millions of people a fresh start.
Free Bankruptcy Records Specific links
Free Bankruptcy Records News
Sex offender to remain free despite new law
A convicted sex offender who faces nearly two dozen charges in Utah but has remained free because of a legal loophole likely will never face trial or be confined to an institution, a prosecutor said Tuesday.
Read more...Supreme Court Lets $675,000 Fine for Music Downloads Stand
The Supreme Court on Monday declined to consider the petition of Joel Tenenbaum, a former doctoral student at Boston University who faces a fine of US$675,000 for illegally downloading 30 songs.
Read more...Supreme Court Lets Stand $675,000 Fine for Music Downloads
The Supreme Court on Monday declined to consider the petition of Joel Tenenbaum, a former doctoral student at Boston University who faces a fine of US$675,000...
Read more...Supreme Court lets stand $675K fine for music downloads
IDG News Service - The Supreme Court on Monday declined to consider the petition of Joel Tenenbaum, a former doctoral student at Boston University who faces a fine of US$675,000 for illegally downloading 30 songs.
Read more...Fort Worth medical institute files for bankruptcy
The filing by the Fort Worth school leaves students with little chance of getting refunds.
Read more...