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How the New Law Changes Bankruptcy (very little)
The new law did not cancel bankruptcy. The new law mainly requires Chapter 7 debtors to produce for the court paperwork which they already have (tax returns and pay stubs), and also imposes some debtor education courses for debtors to attend prior to receiving a discharge. Otherwise, for most Chapter 7 cases, the law has not substantially changed bankruptcy. Here below are listed what I see as the most important changes for Chapter 7 debtors.
- Chapter 7 debtors still get to keep all their property and discharge all their unsecured debt.
- Debtors must take a brief financial management class, once before bankruptcy and once after your case is filed. The class lasts from 30 to 90 minutes, and may be taken online, at home, or at your local consumer credit counseling office.
- Debtors must provide their attorney a copy of the pay stubs they've received for the past 60 days prior to the time the case is filed.
- Debtors must provide their attorney a copy of their last filed tax return.
- Chapter 7 bankruptcy will not be available for certain debtors whose income is above prescribed income limits (a link to be provided soon), and who are also unable to conform within certain income and expense guidelines known as "the means test." Your attorney will be able to tell you if your income and expenses conform within the guidelines.
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