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More About Bankruptcy 13...
It is almost certain that under the new law filing bankruptcy will cost more. You probably won't lose any sleep over people who abused bankruptcy, but there are people who lose jobs or have uninsured medical expenses who the new law hurts. Most of the changes will cost you money one way or the other. You are also required to attend money management classes at your expense before your debts are discharged. Under the old bankruptcy law, the amount of equity in your house protected from creditors was set by the state where you filed. Under the new bankruptcy law, if you live in a state for less than two years and it has a better exemption than where you lived previously, you can't use the more favorable exemption. It gets more complicated.
If any of the requirements of the new law confuse you and you decide you need a bankruptcy attorney, it's going to cost you more. It will be more difficult to find an attorney willing to handle your bankruptcy because of the liability and the time and effort it takes to verify all your information.
If you do find an attorney willing to file, it will cost you a lot more.
See 'Further Changes Brought About by the New Bankruptcy Law' for information on Chapter 13 disposable income and changes regarding personal property.
You have information about the new bankruptcy law requirements for credit counseling, the income and means tests for chapter 7, residency requirements, and attorney liability, but there are even more changes you should know about.
If you are allowed to file Chapter 7 bankruptcy, there are changes in how your personal property is valued. Under the old law, you could value your personal property at basically 'garage sale' prices.
Under the new bankruptcy law, you must value your property it the price it would cost to replace it retail, taking into account its age and condition. A car is easier because you can just look up the blue book price.
Under the new law, you must live in a state for two years before filing bankruptcy in order to use the state's exemption laws.
More people will be forced to use chapter 13 bankruptcy under the new law.
Chapter 13 bankruptcy required that you devote all your disposable income to repaying debts. That part hasn't changed, but how you calculate your disposable income has.
Under the new bankruptcy law, your monthly income is your average income for the six months before filing your petition. The amount of 'disposable income' left may be more than what you have to spare every month.
Under the old law, if your bankruptcy case was dismissed for any reason and you still couldn't pay your bills, it wasn't much of an issue to refile. The new law limits debt relief if you are filing after a prior case was dismissed. Even if the attorney will not take you on as a client to file bankruptcy, they may be willing to give you legal advice.
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