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The new bankruptcy law has provisions that make it harder for the people in debt to file bankruptcy.

In addition to the new credit counseling requirement for all filers and the means test for chapter 7, there are other changes in the bankruptcy laws.

You are required to do credit counseling within six months of filing your bankruptcy petition.

There are new residency requirements. 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. If you bought your house less than 40 months (that's three and a quarter years) before filing bankruptcy, or violated securities laws, or have been found guilty of certain criminal conduct, you can only exempt up to $125,000 regardless of a state's exemption.

If any of the requirements of the new law confuse you and you decide you need a bankruptcy lawyer, it's going to cost you more. If you can find a lawyer willing to take your bankruptcy case, it is going to cost you more because of the time and effort it takes the lawyer to verify your information. The president of the American Bankruptcy Institute has reported that some lawyers 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 lawyer liability, but there are even more changes you should know about. It's no surprise these changes will make it harder and costlier to file bankruptcy. 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. That reason behind that was to force people who could repay all or part of their debts to do so instead of using bankruptcy chapter 7 which wiped away most debts.

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.

There are a lot of changes to the bankruptcy laws. Even if the lawyer will not take you on as a client to file bankruptcy, they may be willing to give you legal advice.



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