Wondering What’s Different About The New Bankruptcy Law?
People used to say that the old bankruptcy law from 1978 was very strict, those people now would certainly be in for a shock when they see just how much stricter the all-new bankruptcy law now is.
So what are the main changes that have been made to the new bankruptcy law?
In order to make sure that only the most in need people qualify for bankruptcy, the government has created what they call the means test.
When you take the means test the government will calculate your monthly income minus a few allowed expenses. If it turns out that your monthly income is above the median income you will be obligated to file chapter 13 bankruptcy.
There are a series of strict guidelines set up by the IRS dedicated to your allowable expenses. For instance, you will be limited to 800 $ for all your housing costs each month and you will also be limited to 200 $ each month to pay for your food.
It is essential to understand that there are both state and federal bankruptcy laws. You will find that some state laws are more lenient than others.
You will be forced by the IRS to pay out around about 75 $ on a credit counseling course that you will have to attend within 180 days from the date you first file for bankruptcy.
With the new laws filing for bankruptcy has become even more paperwork driven! You will have to provide and fill out a whole load of forms in order to prove that you are worthy of bankruptcy.
Some of the things that you are going to have to provide the IRS with will include: a list of all your unsecured and secured creditors; a detailed list of your expenses and your monthly income; liabilities and assets; your most recent tax return; your photo ID and pay stubs.
There are now hefty legal fees that you will have to pay thanks to this all new bankruptcy law. This is because you will have to have a bankruptcy attorney certify that your figures are accurate.
The interpretation of the new bankruptcy law
By law you are not obligated to use the services of a bankruptcy lawyer, however it is certainly highly recommended that you do in less of course you have qualifications in this area.
The one thing that you must remember is that bankruptcy, no matter the circumstances, is always your absolute last option. If you file for bankruptcy it will stay on your public record for up to 10 years, so if you can avoid it you will be most likely better off.
