| Some laws to filing chapter 7 or 13 bankruptcy are | | | | bankruptcy case will increase, in turn driving up your |
| common knowledge, such as the requirement for all | | | | lawyer bill. |
| filers to undergo debt or credit counseling to help | | | | Can You Live On Less? Under the old rules, those |
| better educate them on their spending habits. There is | | | | who filed for chapter 13 did have to devote all |
| also the law stating that debtors with higher incomes | | | | disposable income to a payment plan. The new laws |
| will have to repay a portion of their debt prior to being | | | | make this a little more challenging. In addition to handing |
| allowed to file for chapter 13 bankruptcy. However, | | | | over all disposable income, chapter 13 filers will have to |
| there have been laws recently taken into effect that | | | | calculate that amount from an expense amount |
| are little known and need to be observed. | | | | allowed by the IRS- meaning they get to dictate what |
| Chapter 7 Bankruptcy Restrictions The most common | | | | your living costs should be. Keeping in mind under |
| form of bankruptcy just got a little more exclusive. | | | | chapter 13 you are still required to calculate disposable |
| Under the old rules people could decide which chapter | | | | income according to an average of what you had |
| of bankruptcy was best for them- most choosing | | | | made over the last six months. |
| chapter 7. However, those with higher incomes must | | | | Value Your Property at Replacement Cost In the past |
| now be aware that they may not qualify to file for | | | | heirlooms and other property that a debtor might want |
| chapter 7 bankruptcy and will be forced to file under | | | | to keep were expected to be of little value- deeming |
| chapter 13. The gauge they use to decipher "high | | | | them exempt. However, new laws force you to value |
| income families" is to compare your current monthly | | | | all property at retail value taking into consideration age |
| income with that of the median monthly income of a | | | | and condition- a requirement that, in most cases, will |
| family of similar size in your state. Another factor to | | | | inflate the cost of your property leaving you at risk of |
| account for is how you current monthly income will be | | | | losing it. |
| calculated. It is not what you are currently making at | | | | Don't Count on State Exemptions The new rules entail |
| the time when you file for bankruptcy but rather an | | | | that a bankruptcy filer live in a sate for at least two |
| average of your income from the six months prior to | | | | years in order to gain from a state's exemption laws |
| making your claim. This poses a big problem for those | | | | otherwise they can only claim those exemptions of the |
| who are filing bankruptcy after recently losing a job. | | | | previous state in which they lived. The same goes for |
| Restrictions on Lawyers Among the new laws | | | | homestead exemptions only this requires over 40 |
| lawyers much personally vouch for the accuracy of | | | | months of residency. |
| the information provided. Thus, time spend on each | | | | |