The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, also known as "the new bankruptcy law, which became effective October 17, 2005. The law provides for changes to existing rules of bankruptcy. Some of these changes is that a potential bankruptcy filers meet "means of proof should be." The test determines whether you are eligible for bankruptcy or not needed.
The term "creditor" refers to money owed to these organizations. "Debtor" refers tothe consumer has money. Registered "Filer" refers to the failure of consumers had.
Here is a summary of key changes:
"The means test" for Chapter 7
A lender may reject an application on file for bankruptcy if the debtor's income exceeds the state median income and the debtor can afford to pay 100 dollars a month for a period of five years to pay off debts. In this case, the debtor for Chapter 13 instead of the file isChapter 7
Mandatory Credit Counseling
Potential bankruptcy filers must undergo credit counseling through an "approved nonprofit budget and credit counseling agency before filing for bankruptcy. Here is the list of government approved agencies consumer credit counseling.
Compulsory education debtor
Chapter 13 filers must complete a course in "personal financial management" before the declaration of bankruptcy.
DischargeDebts
Some debts can not be dismissed. Exposures to a single creditor in excess of $ 500 for luxury goods that have been incurred 90 days before the submission can not be dismissed. In addition, cash advance of $ 750 within 70 days including non-dischargeable.
Proof of income and tax filings
Filer must show that they have paid taxes over last year. This also offers the verification of income. If a filer do not pay taxes for the previous year, must paybefore continuing the process of bankruptcy.
Time between discharge
When you sign up for Chapter 7, and you have a previous version, in the last 8 years - can no more relief. Use this time to get to 6 years.
Fewer "Automatic Stay" Protections
Filer will no longer enjoy some of the legal safeguards that have used it to stop, for example, or delaying evictions, license suspensions or childProcedures.
Lawyer tests required
Lawyers for the verification of the information in petitions and schedules are included responsibility "is well rooted in reality." Lawyers are required to sign petitions to recognize this fact.
Eviction Proceedings
The declaration of bankruptcy will not stop eviction proceedings.
Priority for Unpaid Child Support and Maintenance
The repayment of child support payments and food take precedence overany other creditor.
Retirement and college savings for protection
The related pension funds such as 401k, 403b and liquidations are treated as goods that are not available for creditors under the bankruptcy, as a. Borrowers can continue to contribute to these accounts, if they can. Other savings fund accounts are exempt, are college kids.
