Welcome to Bankruptcy Guide
Chapter 13 Bankruptcy 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.
Chapter 13 Bankruptcy Specific links
Watch Free Videos At Mevio!
- Tons of Free Videos, Only At Mevio.com
-- http://www.mevio.com/
Modern Day Jesus: Santa vs. Jesus
- Jesus Christ! Modern day life is pretty tough for ol' J.C. - especially when he has to compete with that conceited Kris Kringle! Watch it on Atom.com
-- http://www.atom.com/
Chapter 13 Bankruptcy News
’05 Bankruptcy Amendment To Be Tested in ’09 - Memphis Daily News
 Memphis Daily News | ’05 Bankruptcy Amendment To Be Tested in ’09 Memphis Daily News, USA - One of the things the means test looks for is if a debtor can afford the installment payments of a Chapter 13 bankruptcy plan, the other major form of ... Filings for bankruptcy increased in 2008 TBO.com - Tampa Bay Online |
Bankruptcy Paralegal Launches Outsourced Paralegal Services to ... - PR.com (press release)
 PR.com (press release) | Bankruptcy Paralegal Launches Outsourced Paralegal Services to ... PR.com (press release), NY - Some of the services Outsourced Paralegal Services provides to its clients includes: drafting of Chapter 7 and Chapter 13 bankruptcy petitions with Easy ... |
Business Bankruptcies - Minneapolis Star Tribune
Business Bankruptcies Minneapolis Star Tribune, MN - A Chapter 7 petition is for liquidation of the businesses; Chapter 11 (or Chapter 12 for farmers or Chapter 13 for small businesses) gives protection from ... |
Constar files for reorganization under Chapter 11 in US Bankruptcy ... - plastemart.com
Constar files for reorganization under Chapter 11 in US Bankruptcy ... plastemart.com, India - Leading global producer of PET bottles, Constar International Inc and certain of its subsidiaries recently filed for reorganization under Chapter 11 in the ... Constar receives Bankruptcy court approval of First Day motions ... Constar International Inc. Receives Court Approval on "First Day ... Constar and Chesapeake file for Chapter 11 |
Bankruptcy: A how-to on going broke - St. Louis Post-Dispatch
 St. Louis Post-Dispatch | Bankruptcy: A how-to on going broke St. Louis Post-Dispatch, United States - The law provides two ways of going broke: Chapter 13 and Chapter 7. Chapter 7 is a "fresh start" bankruptcy in which your unsecured debts are simply erased. ... Vt. bankruptcies spike in 2008 should I go bankrupt? |