THE BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT (BAPCPA) OF 2005
The new bankruptcy law establishes stricter criteria for filing Chapter 7 bankruptcy cases. A debt can typically be discharged in a Chapter 7 bankruptcy case if it is unsecured, which means there is no property securing the debt. Unsecured debts include, but are not limited to, credit card debt, medical bills and most personal loans. A Chapter 13 bankruptcy case involves a three to five year repayment plan. To qualify for Chapter 13 bankruptcy, you must have a regular source of income, have enough disposable income, and your debts may not exceed a certain amount.
The new bankruptcy law created an income-based test for measuring a debtor’s ability to repay debts. Under the means test, debtors with insufficient income in proportion to their debts can still file a Chapter 7 bankruptcy, which erases your unsecured debts entirely under most circumstances. The means test compares the debtors excess monthly income to the amount of unsecured debt to determine how much a debtor could repay to creditors in a Chapter 13 bankruptcy. Because this calculation is hypothetical and does not necessarily reflect the debtors true financial condition, a debtor who appears to be able to repay the minimum portion of his debts but who, in reality, cannot, may be permitted to file under Chapter 7 bankruptcy. Unfortunately, the means test is more complicated than we can explain well here.
The new bankruptcy law requires every debtor filing for protection under Chapter 7 bankruptcy or Chapter 13 bankruptcy of the U.S. Bankruptcy Code to take a credit counseling course before filing and a financial management course after filing. These courses are set up for you in our law office and may be taken online or by phone. The credit counseling course takes approximately 1-hour to complete and the financial management course takes at least 2-hours to complete.
When you are filing a bankruptcy, it is critical to understand your legal rights. The attorneys at The Law Office of Donald E. Hood, PLLC personally meet with every client for the initial consultation to determine the appropriate course of action with FREE consultations and offer affordable payment plans.
The new bankruptcy law establishes stricter criteria for filing Ch. 7 bankruptcy cases. A debt can typically be discharged in a Ch. 7 case if it is unsecured, which means there is no property securing the debt.
Filing for bankruptcy is an important decision, and The Law Office of Donald E. Hood, PLLC wants to make sure that the type of bankruptcy protection that you choose is the right one for you.
You are entitled to keep a generous amount of your belongings when filing Ch. 7 bankruptcy. Texas law provides for high personal exemptions–items that are protected from seizure by your creditors.
