New bankruptcy information shows radical changes
After 15 years of debate, bankruptcy law reform passed into law. These new laws dramatically change the landscape for all who file. Debtors seeking current bankruptcy information must verify qualification under stringent new standards once the new Bankruptcy Code becomes effective.
Officially known as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, this law should become effective on October 17, 2005. The House bill passed on March 11. 2005, the Senate confirmed on April 14, 2005, and by operation of law, unless vetoed by the President, automatically becomes law on the 180th day after Senate confirmation. The President has remained a strong supporter of this law since taking office, making a Presidential veto extremely unlikely.
Changing times and traditional bankruptcy information
A minority of debtors are still permitted to file Chapter 7. According to the latest bankruptcy information provide by the Act, income will be used as a qualifying factor. Any debtor whose income is below the state median income pass the first prong of the test. Thereafter, if debts owed exceed a legislative limit, and pass a formulaic test, debtors qualify for Chapter 78 discharge.
Chapter 13 plan payments are higher. New bankruptcy information indicates that the standard of living permitted by the government is based on the IRS standard used when prosecuting tax evasion. No allowance is made for special expenses, such as physical or mental disability, current health problems, or emergencies. For more bankruptcy information, see New Laws.
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