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