Moe’s B2B World

The all new bankruptcy law is even harsher than the old one, established in 1978. It tightens the requirements of those who are filing for bankruptcy and for the attorneys that are helping them do so.

The key changes implemented in the new bankruptcy law of today.

In order to make sure that only the most in need people qualify for bankruptcy, the government has created what they call the means test.

When you take the means test the government will calculate your monthly income minus a few allowed expenses. If it turns out that your monthly income is above the median income you will be obligated to file chapter 13 bankruptcy.

There are a series of strict guidelines set up by the IRS dedicated to your allowable expenses. For instance, you will be limited to 800 $ for all your housing costs each month and you will also be limited to 200 $ each month to pay for your food.

You must remember of course that in every state the laws do change so you must find out how your state laws affect you. You may be lucky and find that your state is a little more lenient than others or of course you may not.

You will have to attend a mandatory credit-counseling course that has to be approved by the IRS within 180 days of your filing for bankruptcy. This is not a free course. Instead it will cost you approximately $75.

With the new laws filing for bankruptcy has become even more paperwork driven! You will have to provide and fill out a whole load of forms in order to prove that you are worthy of bankruptcy.

The IRS will want to see among other things, a complete list of all of your secured and unsecured creditors, a list that details where all your income is coming from and where your expenses are coming from, a recent tax return and naturally your photo ID.

Thanks to the new law, you are going to have to pay a considerable amount more on your bankruptcy attorney. This is thanks to the fact that there is now a whole lot more work for your bankruptcy attorney to do.

How To Interpret The Bankruptcy Law

At the time of writing there is nothing in the bankruptcy law that states you must have a bankruptcy lawyer on your case. Nevertheless with the exception that you have studied the law, you really should use a bankruptcy lawyer, you will need his experience to make sure you get the best result out of your bankruptcy for yourself.

If you are thinking that you won’t employ a bankruptcy lawyer in order to save yourself money, it is more than likely that you will end up actually being worse off financially if you go down this route.

This entry was posted on Tuesday, August 12th, 2008 at 3:14 pm and is filed under Education.You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.