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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. Most of the changes will cost you money one way or the other.

There are new residency requirements. In Florida, your home would have been exempt no matter how long you lived there. 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. Under the new law, if information provided in your case is found to be inaccurate, the attorney is subject to various fines and fees. If you can find an attorney willing to take your bankruptcy case, it is going to cost you more because of the time and effort it takes the attorney to verify 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.

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. 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. Since you have to come up with a retail price and your attorney has to certify it's correct, you just about have to have an appraiser to the valuation. 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. That part hasn't changed, but how you calculate your disposable income has. Then, instead of subtracting your actual expenses, you use allowed expense amounts set by the IRS. These amounts are often lower than your actual costs. That means more chapter 13 bankruptcy plans will fail.

There are a lot of changes to the bankruptcy laws. It would probably be a good idea to consult an attorney before you file.



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