The Bankruptcy Code and New Law
If you are thinking about bankruptcy it is important to understand the bankruptcy laws, what are the laws in your state and how these personal bankruptcy laws will affect your bankruptcy case.
New bankruptcy laws were implemented in 2005 with passage of the Bankruptcy Abuse Prevention and Consumer Protection Act. These widespread bankruptcy laws included changes which now require debtors to get mandatory credit counseling prior to filing bankruptcy. They also implemented stricter eligibility for Chapter 7, reduced automatic stay for certain actions, required tax returns and proof of Income to be verified prior to filing bankruptcy, increased the priority for unpaid child support and alimony payments, increased Chapter 13 filings, and required debtors to complete a mandatory financial management education course prior to the discharge of debts through bankruptcy.
Laws about bankruptcy can be complicated. Make sure prior to filing bankruptcy you understand what the laws are in your state. In addition to federal bankruptcy laws, each state has created specific bankruptcy exemptions. In Chapter 7 Bankruptcy, these exemption laws in your state will determine if you can keep your home and car and other personal property. Exempt property can be kept; nonexempt property may be sold to repay your unsecured creditors. For Chapter 13 Bankruptcy exemption laws in your state will determine how much money must be paid to non-priority, unsecured creditors through your Chapter 13 Bankruptcy repayment plan.
Bankruptcy laws are periodically updated and new laws for bankruptcy should be discussed with a bankruptcy lawyer.