Changes to Chapter 7 and Chapter 13 Bankruptcy: Overview
Every aspect of bankruptcy, including the filing process, debt
repayment, and re-filing for bankruptcy has changed dramatically.
Here is a brief summary of how the changes apply to Chapter 7 and
Chapter 13 bankruptcy proceedings.
Changes to both Chapter 7 and Chapter 13 Proceedings:
| Before
the New Law |
After
the New Law |
| You can file for bankruptcy at
any time. |
Before you can file for either
Chapter 7 or Chapter 13 bankruptcy, you will have to
attend a credit counseling session within six months of
filing. |
| Honoring your bankruptcy
arrangements will relieve your debts. |
You will have to pay for and
attend a debtor education class in order to relieve any of
your debts. |
Changes to Chapter 7 Proceedings:
| Before
the New Law |
After
the New Law |
| The courts decide whether you
qualify for a Chapter 7 bankruptcy. |
A new two-part Means Test
decides whether you qualify for a Chapter 7 bankruptcy.
If you fail the Means Test, you may have no choice but to
file for Chapter 13 and repay your debts.
Learn more about how the Means
Test works. |
| You can file another Chapter 7
bankruptcy in 6 years. |
The new bankruptcy law will
extend the waiting period between Chapter 7's from 6 to 8
years. |
Changes to Chapter 13 Proceedings:
| Before
the New Law |
After
the New Law |
| The court decides what debts
you are able to pay. The court also helps you decide how
much money you will reasonably need for your expenses. |
The court will use guidelines
set by the IRS to decide for you how much money you will
reasonably need for your expenses. These IRS guidelines
are stricter. If you do not agree with the court's
decision, you will have to argue the decision in court. |
| You decide how long you have to
stay in your payment plan, usually from 3-5 years. |
If your income is above your
state's median income, you must pay your debts in a
five-year plan.
Learn more about your state's median income here. |
| You can relieve most of your
debts by filing a Chapter 13 bankruptcy. |
The new law reduces the types
of debts you can discharge. Debts like those incurred for
breach of fiduciary duty, or recent credit card usage can
no longer be discharged in Chapter 13. |
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. THIS IS IN NO
WAY GIVING ANY LEGAL ADVICE OR REPRESENTATION. THE INFORMATION
CONTAINED HEREIN WAS COMPILED FROM VARIOUS ARTICLES. FOR ANY LEGAL
ADVICE OR REPRESENTATION SEEK YOUR OWN LEGAL COUNSEL.
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