Related articles: Debt Kit -- Settle unsecured debts for less than half of amount owed Credit Kit -- Improve credit rating and reduce monthly bills by $200+ |
Debt > Bankruptcy > New Bankruptcy Legislation |
Revisions to the Bankruptcy Code Make It Tougher to File Bankruptcy After an eight year long battle funded by the banking and credit card industries, who contributed more than $40 million to federal election campaigns during this period, The United States Bankruptcy Code has finally been amended. The new bill was approved by the Senate in March 2005 and by the House on April 14, 2005. The changes to the Bankruptcy Code became official law on October 17, 2005. Highlights of the bankruptcy bill include: Debtors who earn more than the median income earned in their state must pass a means test in order to file Chapter 7 bankruptcy. If the debtor earns more than the median income in his or her state, secured debt and necessities (alimony, child support, living expenses, etc.) are subtracted from the debtor's monthly income to determine what is left over for repayment of unsecured debt. If it is determined that a debtor can pay the lesser of $10,000 over a 60 month period ($100 per month) or 25 percent of his debt, which must be at least $6,000, then he must file Chapter 13 bankruptcy and repay some or all of his unsecured debt over a five year period. If the debtor does not pass the means test, he can file Chapter 7 just as with the old law and have much or all of his unsecured debt erased. Debtors will be required to pay for credit counseling at an approved credit counseling organization. Those contemplating filing bankruptcy must obtain a briefing about credit counseling services not more than 180 days before filing bankruptcy. The banking and credit card industries wanted this provision included to encourage those contemplating bankruptcy to sign up for credit counseling instead. This provision applies to everyone regardless of whether or not they earn at least the median income in their state. Order our downloadable bankruptcy kit and find out if this is the best option for you. |
Debt > Bankruptcy > New Bankruptcy Legislation |
Related articles: Debt Kit -- Settle unsecured debts for less than half of amount owed Credit Kit -- Improve credit rating and reduce monthly bills by $200+ |
