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The Basics of the New Bankruptcy Law
By
C. Baker
The new
bankruptcy law took effect recently and
significantly changed the rules of filing
bankruptcy. If you're not sure exactly what
these changes mean for you, read this
article which lays out the basics of the new
bankruptcy law.
The new bankruptcy law has brought about a
number of changes to the filing process.
Here are the major ones:
Credit Counseling The new bankruptcy
law dictates that anyone who wants to file
bankruptcy must complete credit counseling
with an agency approved by the United States
Trustee's office. After the bankruptcy case
has ended, filers must attend yet another
counseling session to learn more about
personal financial management.
Restricted Eligibility In the past,
it was possible to choose between filing
Chapter 7 or Chapter 13 bankruptcy. Under
the new bankruptcy law, eligibility for
filing Chapter 7 is based on income. A
filer's average income for the six months
prior to filing bankruptcy must be below
their state's median income.
Property Values Under old bankruptcy
law, those who filed Chapter 7 bankruptcy
were allowed to place a value on their
personal property based on what they could
sell it for at an auction. The new
bankruptcy law requires that property now be
valued at replacement value. This puts
increased value on the property and ensures
that more filers will have their property
taken and sold by a trustee.
State Exemptions Under new bankruptcy
law, your state's exemptions will apply only
if you have lived in the state for two
years. If you have been in the state for
less than two years, you will receive the
exemptions from the state that you lived in
previously.
Conclusion
Are you one
of the many that suffer from insurmountable
debt and wonder if bankruptcy is an option?
Give us a call at (203) 924-6700 or
contact us.
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