In April 2005, Congress revised the bankruptcy laws by enacting the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This revision of bankruptcy laws became effective October 17, 2005. It is now more difficult and more expensive to file a bankruptcy case. However, people who really need to file a bankruptcy case may still do so.
The following are some of the revised features of the new bankruptcy laws.
Before individuals can file a bankruptcy case, they must obtain a certificate of pre-bankruptcy credit counseling. This certificate must be obtained from an approved non-profit credit counseling agency. A person considering filing a bankruptcy case will receive a briefing on opportunities for available credit counseling and will be assisted in performing an individual budget analysis.
The new bankruptcy laws implemented what is known as a “mean’s test.” If the combined gross income of a family is greater than the median family income in the state, a person may be required to file a Chapter 13 repayment plan where debts are paid over a period of 36 months to 60 months instead of a Chapter 7 case where debts are eliminated. Your attorney will gather finical information from you and perform this means test prior to bankruptcy filing.
In addition, in order to obtain a discharge in a Chapter 13 case or a Chapter 7 case, a person must obtain a certificate of completion of an instructional course in personal financial management.
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