The new bankruptcy law took effect recently and significantly changed the rules of filing bankruptcy.
If you're not sure exactly what these changes mean for you, read this article which lays out the basics of the new bankruptcy law.
The new bankruptcy law has brought about a number of changes to the filing process.
Here are the major ones: Credit Counseling The new bankruptcy law dictates that anyone who wants to file bankruptcy must complete credit counseling with an agency approved by the United States Trustee's office.
After the bankruptcy case has ended, filers must attend yet another counseling session to learn more about personal financial management.
Restricted Eligibility In the past, it was possible to choose between filing Chapter 7 or Chapter 13 bankruptcy.
Under the new bankruptcy law, eligibility for filing Chapter 7 is based on income.
A filer's average income for the six months prior to filing bankruptcy must be below their state's median income.
Property Values Under old bankruptcy law, those who filed Chapter 7 bankruptcy were allowed to place a value on their personal property based on what they could sell it for at an auction.
The new bankruptcy law requires that property now be valued at replacement value.
This puts increased value on the property and ensures that more filers will have their property taken and sold by a trustee.
State Exemptions Under new bankruptcy law, your state's exemptions will apply only if you have lived in the state for two years.
If you have been in the state for less than two years, you will receive the exemptions from the state that you lived in previously.