People used to say that the old bankruptcy law from 1978 was very strict, those people now would certainly be in for a shock when they see just how much stricter the all-new bankruptcy law now is.
So what are the main changes that have been made to the new bankruptcy law?
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.
The IRS has set up some strict guidelines for your allowable expenses. You will be permitted up to 200 $ every month for your food and an additional 800 $ every month to cover the costs of your home.
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.
There is a mandatory course on credit counseling that the IRS will have you participate in. You must attend this course within 180 days after you file bankruptcy. It will cost you about 75 $.
Paperwork is another thing that has been significantly increased with the new law.
Some of the things that you are going to have to provide the IRS with will include: a list of all your unsecured and secured creditors; a detailed list of your expenses and your monthly income; liabilities and assets; your most recent tax return; your photo ID and pay stubs.
Because of a lot of the changes in the new law, your bankruptcy attorney is going to have a lot more work on his hands and so you will have to pay him a lot more.
The interpretation of the new 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.
The one thing that you must remember is that bankruptcy, no matter the circumstances, is always your absolute last option. If you file for bankruptcy it will stay on your public record for up to 10 years, so if you can avoid it you will be most likely better off.
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