“The New Law”

Sounds scary! Many people rushed to file bankruptcy when they heard these words thinking they would not be able to file after the “new law” went into effect. In reality most people still qualify to file bankruptcy under the “new law” and for many it is actually easier to qualify to file now. Here are some of the changes under the new bankruptcy law:

1) Credit Counseling: Debtors are now required to take a credit counseling course prior to filing their bankruptcy. They also need to complete a 2nd financial management session, called “Debtor Education” once they have been filed in order to get their discharge. If this course is not completed the bankruptcy case will be dismissed.

2) Means Testing: A fancy, scary name for a number crunching exercise to determine if you can file a Chapter 7 bankruptcy or need to file a Chapter 13 bankruptcy. You might think this new test will prevent you from filing. It won’t. Most people have no trouble passing the means test.

3) Documentation: More documentation is required. Generally, 6 months pay stubs and bank statements and the previous 2-4 year’s tax returns are now required, Homeowners have additional documents required. We have a complete list of the required documents that you can download here.

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