| If you think that you have nothing now, the new | | | | - More paperwork - In order to prove that |
| bankruptcy laws could even shrink that! The new | | | | bankruptcy is necessary, the consumer will have to |
| bankruptcy law overhauls the laws that were | | | | present much more documentation. Such things a |
| modified in 1978. It not only tightens the | | | | debtor must provide are: a list of all unsecured and |
| requirements for those who want to file for | | | | secured creditors, proof of taking the credit |
| bankruptcy but for their attorneys as well. | | | | counseling course, a detailed list of one's expenses |
| These are several of the major changes that were | | | | and monthly income, liabilities and assets, the most |
| initiated under the new bankruptcy law: | | | | recent tax return, photo ID and pay stubs. |
| - "Means Test" - You now have to show that you | | | | - Hefty legal fees - A bankruptcy attorney must now |
| are not abusing the use of bankruptcy. This test | | | | "certify" that their client's figures are accurate. If |
| calculates what you make per month minus certain | | | | they prove not to be, the lawyer as well as the |
| expenses that are allowed. The "median income" will | | | | client may face sanctions. This means that your |
| vary from state to state. If you fail the "means test', | | | | attorney must do more investigating and |
| then you must file for Chapter 13 bankruptcy. | | | | fact-checking to make sure your information as well |
| - Expense allowances - Guidelines are put forth by | | | | as his certification is above-board. |
| the IRS for allowable expenses, and they are stingy. | | | | Is it best to have a bankruptcy attorney when and if |
| The food allowance is approximately $200 a month, | | | | it comes time to file for bankruptcy? There is |
| and the housing allowance is approximate $800 a | | | | certainly no legal requirement stating that you have |
| month. | | | | to retain a lawyer. However, you would be very |
| - Residency requirements - There are state and | | | | foolish not to do so. If you choose to file on your |
| federal bankruptcy laws, and some state laws are | | | | own, and forget to file certain documents, your case |
| more lenient than others. Texas and Florida have | | | | can be subject to dismissal and you will need to start |
| very generous "homestead allowances". The new | | | | again from the very beginning. As an example, a |
| bankruptcy law discourages you to look around for | | | | couple recently tried to file for bankruptcy online. |
| the best deal. You are not permitted to file for | | | | They were not exactly sure if we should have filed |
| bankruptcy in a more favorable state unless you | | | | jointly or just the husband. They were doing it on |
| have resided there for a minimum of two years. | | | | their own and really goofed things up and now they |
| - Mandatory credit counseling - Another change that | | | | are paying for it! Please do not do this in an attempt |
| came with the new bankruptcy law is that you have | | | | to save some money because it will only come back |
| to take a credit counseling course that has been | | | | to haunt you in the end. It is in your best interest to |
| approved within 180 days of filing for bankruptcy. | | | | have an experienced bankruptcy attorney working |
| Sorry to say, this is not a free course. The cost of | | | | for you. |
| this course is approximately $75.00. | | | | |