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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. You are also required to attend money management classes at your expense before your debts are discharged. 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. 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.
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.
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. Otherwise you must use the exemptions of the state where you used to live.
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.
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. 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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