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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.

If you have been moving around, the exemption of the state where you lived most of the time before the two-year period is used. 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. The president of the American Bankruptcy Institute has reported that some attorneys say they may increase their fees by 75 to 100 percent.

It is clear from the changes mentioned here that it's going to be more difficult and costlier to file bankruptcy no matter what chapter you use to file.

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.

Also, under the old bankruptcy rules, the exempt personal property you could keep under chapter 7 was determined by the laws of the state where you lived if you resided in the state for at leas three months.

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. Under the old rules, you subtracted your actual expenses from your monthly income to arrive at your disposable income. Then, instead of subtracting your actual expenses, you use allowed expense amounts set by the IRS. The amount of 'disposable income' left may be more than what you have to spare every month. That means more chapter 13 bankruptcy plans will fail. 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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