The Bankruptcy Breakdown

The new bankruptcy law enacted last year has a few new requirements that are outlined below:

Means Test: Uses your income to determine if you can file.

Debt Counseling: Each consumer must attend approved credit counseling six months prior to filing for bankruptcy.

Lawyers are Accountable:  The bankruptcy lawyer is now accountable for inaccurate information in a client’s case.  Even if the lawyer had no reason to doubt the information, he can be held responsible for anything he forwards onto the court.

Repayment Period: The repayment period has changed from three years to five.

Homesteads:   The exemption limits vary from state to state, and basically limit the amount of equity you can keep in your home when you file for bankruptcy.

Alimony and Child Support: Debts are now prioritized from 1 to 7.

Tithing: Tithing can be an effective way for a consumer who didn’t qualify for Chapter 7 to drop from Chapter 7 to Chapter 10 by giving 15% of their income to charity.  ■