As you may have heard, major bankruptcy reform became effective in October 2005. Although the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) has some restrictions for filing and requires you to provide more documentation to the bankruptcy trustee, most people can still file for bankruptcy relief. Contact our office to find out how the new bankruptcy laws affect you.
Below are a few of the components of the current law:
1. You are required to take a credit counseling class before filing for bankruptcy and a post filing class before your debts are discharged.
2. Congress placed a cap on the homestead exemption (that is, the amount of equity you are entitled to keep, free from claims of creditors).
3. The state where you have resided for the majority of the two years preceding filing for bankruptcy affects which state’s property exemptions you are entitled to claim.
4. Your income (and possibly that of other members of your household) and certain allowed expenses and deductions are considered to determine whether you qualify to file for Chapter 7 or Chapter 13 bankruptcy.