The all new bankruptcy law is even harsher than the old one, established in 1978. It tightens the requirements of those who are filing for bankruptcy and for the attorneys that are helping them do so.
The key changes implemented in the new bankruptcy law of today.
A so-called “means test” has been created in order to better assess whether or not a person is right for bankruptcy.
When you take the means test the government will calculate your monthly income minus a few allowed expenses. If it turns out that your monthly income is above the median income you will be obligated to file chapter 13 bankruptcy.
The IRS sets up strict guidelines for what they call ?allowable expenses.? Herein you will be allowed $200 per month for food and $800 per month for housing expenses.
Obviously in each state of the United States of America the laws do tend to change a little, depending on the state you reside in, this may help you or it may hinder you.
You will be forced by the IRS to pay out around about 75 $ on a credit counseling course that you will have to attend within 180 days from the date you first file for bankruptcy.
Under the all new bankruptcy law there is now more paperwork that you will have to do so that you can prove that bankruptcy is necessary.
The IRS will want to see among other things, a complete list of all of your secured and unsecured creditors, a list that details where all your income is coming from and where your expenses are coming from, a recent tax return and naturally your photo ID.
Because of a lot of the changes in the new law, your bankruptcy attorney is going to have a lot more work on his hands and so you will have to pay him a lot more.
The interpretation of the new bankruptcy law
By law you are not obligated to use the services of a bankruptcy lawyer, however it is certainly highly recommended that you do in less of course you have qualifications in this area.
The one thing that you must remember is that bankruptcy, no matter the circumstances, is always your absolute last option. If you file for bankruptcy it will stay on your public record for up to 10 years, so if you can avoid it you will be most likely better off.