Bankruptcy Law Changes

The new bankruptcy law is in effect and has changed who may file under what chapter. Some filers with higher incomes won't be allowed to use Chapter 7, but will instead have to repay at least some of their debt under Chapter 13. The new law also requires that debtors get credit counseling before they can file a bankruptcy case along with additional counseling on budgeting and debt management before their debts can be completely eliminated.

Chapter 7 (liquidation) versus Chapter 13 (repayment).

The new law will prohibit some filers with higher incomes from using Chapter 7. Under the new rules, the first step in figuring out whether you can file for Chapter 7 is to measure your "current monthly income" against the median income for a household of your size in your state. If your income is less than or equal to the median, you can file for Chapter 7. If it is more than the median you must show whether you have enough disposable income, after subtracting certain allowed expenses and required debt payments, to make payments on a Chapter 13 plan. If you cannot, you may be allowed to to file for Chapter 7.

The best thing you can do for yourself if you are considering filing for bankruptcy is to become informed about the law and it's recent changes. Call an experienced Bancruptcy attorney in your state and schedule an appointment in order to discuss how the law affects you .