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Tuesday November 21st 2017

New Bankruptcy Law Explained

On October 17, 2005, new bankruptcy law went into effect, changing the technique of filing for bankruptcy within the U . s .. This new shift in law requires additional steps to be taken by the attorney and the debtor but has been aimed at benefiting the debtor. The next details explained within the changes in the law and how they’re going to affect anyone considering bankruptcy.

Documentation
The documentation required for filing for bankruptcy has been increased, asking the debtor to supply more information thoroughly detailing all of their income and expenses. If expenses exceed the IRS allowance, a ‘special circumstances’ document should be submitted explaining the justifications for the extra expenses. an announcement of accuracy also needs to be submitted with the special circumstances document. The additional documentation makes the task of filing take more time but provides more accuracy to a debtor’s financial dilemma. This may set off more debt relief.

Counseling
In an try and decrease the number of folk filing for bankruptcy, the brand new law requires that debtors receive counseling from an approved credit counseling agency within six months ahead of filing for bankruptcy. The purpose of the counseling is with the intention that everyone is not making an uninformed decision to file for bankruptcy. It’s also the hope of the court that counseling will provide alternative options for individuals who truly don’t have to file.



The Means Test
Before the recent law, consultations with an attorney would allow the customer to come to a decision what sort of bankruptcy they felt suited them best. However, the most recent law is framed to minimize the number of Chapter 7 filings by only allowing those who fall under their median state income, adjusted for family size and inflation, and those that meet rigorous standards under the means test to file for it. The remaining of the folks who don’t meet these standards ought to be evaluated by a chain of complex, mathematical formulas that adjust annually to check new median incomes and expense standards. Clients who do not qualify throughout the means test can be required to file for Chapter 13 bankruptcy. The recent law also extended the Chapter 13 term from a three- to five-year term, to a mandatory five-year term. During the mandatory five-year term, the customer ought to be supervised and represented before they could receive their discharge.

The effects of the recent law make the technique of filing for bankruptcy more complex, requiring attorneys to specialise in bankruptcy law. To entirely know how the brand new bankruptcy laws for your state can impact your debt and affect your life, speak with an area bankruptcy lawyer.

Unemployment, garnishments, and repossessions can happen to anyone. When bad things happen to good people, and you’re filing for bankruptcy in NY, the bankruptcy attorneys at Doyaga and Schaefer are here to aid. Stop the harassment, the concern, the financial stress. For a free same-day consultation, call 718-488-7500 or 516-656-7500, or visit our website at bigapplebankruptcy.com for additional information.

J.K. Lasser’s The New Bankruptcy Law and You (J.K. Lassers)… ($0)

No book will make a consumer into an av-rated, board certified bankruptcy specialist overnight. Or even over weeks.

That said, this book is a very good introduction to bankruptcy law for consumers. It discusses both Chapter 7 and Chapter 13 in some depth, and it has no obvious deficiencies. It’s also a nice quick and easy read, partly because it’s fairly short and well-organized.

The New Bankruptcy Law and You also spends a good deal of time comparing and contrasting pre-2005 bankruptcy law to post-2005 bankruptcy law, and I’m not sure whether that’s a feature or a flaw. It seems to me that a hypothetical reasonable consumer contemplating a bankruptcy of either common flavor (7 or 13; a Chapter 11 is available to individuals, but it’s a post-graduate subject, and uncommon) would have little interest in the law that is no longer available to them.

On the other hand, the use of the compare and contrast with the older law approach does provide a smooth framework for presenting the current version of the law. And since many people filed for bankruptcy prior to 2005, this book does a service to them and those who heard about their experiences by explaining just how much Congress made the process of consumer bankruptcy harder, more dangerous, more expensive, and less effective.

As the book makes clear, the discharge in either a Chapter 13 or a Chapter 7 is still very valuable, and if you need it, the pain of the process is still worthwhile. But Congress certainly tinkered with the pain/value proposition of both common consumer bankruptcy chapters, and not in a way that was consumer-friendly. But if you need penicillin because you have pneumonia, you put up with the pain of the shot; and if you need to file a bankruptcy of either flavor because of overwhelming debt, you put up with the pain to get your fresh start.

The tone of the book is one of its best features. The authors are clearly compassionate to the plight of debtors (the people who used to be called “bankrupts” under the much older version of the law); the authors are also clearly a little cranky with Congress for making honest debtors jump through so many more flaming hoops to obtain their discharge.

Because the authors are experienced in bankruptcy law, they also know what to emphasize. For instance, the section on the full disclosure requirements is excellent, and includes this sentence: “If there are things in your financial life that you don’t want anyone to find out about, please do not file a bankruptcy. If you fail to disclose something of significance, you can end up in jail.”

That’s important for a debtor to hear, for obvious reasons, because it’s the simple truth.

But the thrust of the book is upbeat, and the prose is straightforward, non-technical and easy to read.

I gave the book four stars instead of five because the exemptions section is obsolete, at least in Arizona where I practice, and I suspect elsewhere; that doesn’t really make the book less valuable if you know that you must check out the exemptions that are applicable in the state in which you may file.

Overall, this book will save you sleepless nights, and give you a good overview of the process (the discussion of the First Meeting of Creditors is worth the price of admission) and make your meeting with your bankruptcy lawyer go easier and smoother, because you’ll know why he or she is asking you all those dumb questions.

One last item; obviously, no book or dvd or streaming tape video can substitute for the judgement of your lawyer, because that’s the product of your specific facts and the lawyer’s experience. So don’t think that you can do this stuff by yourself just because you read a good book. There’s no requirement that an individual use an attorney who is board certified or av rated, or AVVO 10 rated, or experienced, or any lawyer at all, to file their own bankruptcy.

But you’re not going to try to take out your own appendix after reading “Your Friend, Your Appendix”, so please don’t think about filing without a lawyer, wherever you may be. Bear in mind that lawyers who file bankruptcy normally use lawyers to file their bankruptcy, because when a lawyer represents himself….Well, you get the idea.

The above does not constitute legal advice and may not be relied upon for legal advice; seek the advice of your own professional in your own jurisdiction prior to making important decisions.

p.s. as I write this postscript, there is a raging debate in Congress over a provision in the Bankruptcy Code that may, after amendment, permit the stripdown of some OR all mortages on residential real property. Will that statute pass? Listen, I’ve practiced bankruptcy law in Phoenix, Arizona for about thirty years, and I’ve watched a long series of amendments to the “New Code” of 1979; and I’ve watched as Congress debated in the past. The 2005 amendments took about a decade to work their way through Congress. So MAYBE the Bankruptcy Code is about to change a lot. And MAYBE it’s not. But if you’re contemplating bankruptcy in Phoenix, Arizona, or anywhere else, you should be aware that the law is currently MAYBE about to change in a way that could be helpful to debtors, IF they qualify and are willing to put up with a Chapter 13 bankruptcy (which makes a root canal look like fun).

J.K. Lasser’s The New Bankruptcy Law and You… ()

No book will make a consumer into an av-rated, board certified bankruptcy specialist overnight. Or even over weeks.

That said, this book is a very good introduction to bankruptcy law for consumers. It discusses both Chapter 7 and Chapter 13 in some depth, and it has no obvious deficiencies. It’s also a nice quick and easy read, partly because it’s fairly short and well-organized.

The New Bankruptcy Law and You also spends a good deal of time comparing and contrasting pre-2005 bankruptcy law to post-2005 bankruptcy law, and I’m not sure whether that’s a feature or a flaw. It seems to me that a hypothetical reasonable consumer contemplating a bankruptcy of either common flavor (7 or 13; a Chapter 11 is available to individuals, but it’s a post-graduate subject, and uncommon) would have little interest in the law that is no longer available to them.

On the other hand, the use of the compare and contrast with the older law approach does provide a smooth framework for presenting the current version of the law. And since many people filed for bankruptcy prior to 2005, this book does a service to them and those who heard about their experiences by explaining just how much Congress made the process of consumer bankruptcy harder, more dangerous, more expensive, and less effective.

As the book makes clear, the discharge in either a Chapter 13 or a Chapter 7 is still very valuable, and if you need it, the pain of the process is still worthwhile. But Congress certainly tinkered with the pain/value proposition of both common consumer bankruptcy chapters, and not in a way that was consumer-friendly. But if you need penicillin because you have pneumonia, you put up with the pain of the shot; and if you need to file a bankruptcy of either flavor because of overwhelming debt, you put up with the pain to get your fresh start.

The tone of the book is one of its best features. The authors are clearly compassionate to the plight of debtors (the people who used to be called “bankrupts” under the much older version of the law); the authors are also clearly a little cranky with Congress for making honest debtors jump through so many more flaming hoops to obtain their discharge.

Because the authors are experienced in bankruptcy law, they also know what to emphasize. For instance, the section on the full disclosure requirements is excellent, and includes this sentence: “If there are things in your financial life that you don’t want anyone to find out about, please do not file a bankruptcy. If you fail to disclose something of significance, you can end up in jail.”

That’s important for a debtor to hear, for obvious reasons, because it’s the simple truth.

But the thrust of the book is upbeat, and the prose is straightforward, non-technical and easy to read.

I gave the book four stars instead of five because the exemptions section is obsolete, at least in Arizona where I practice, and I suspect elsewhere; that doesn’t really make the book less valuable if you know that you must check out the exemptions that are applicable in the state in which you may file.

Overall, this book will save you sleepless nights, and give you a good overview of the process (the discussion of the First Meeting of Creditors is worth the price of admission) and make your meeting with your bankruptcy lawyer go easier and smoother, because you’ll know why he or she is asking you all those dumb questions.

One last item; obviously, no book or dvd or streaming tape video can substitute for the judgement of your lawyer, because that’s the product of your specific facts and the lawyer’s experience. So don’t think that you can do this stuff by yourself just because you read a good book. There’s no requirement that an individual use an attorney who is board certified or av rated, or AVVO 10 rated, or experienced, or any lawyer at all, to file their own bankruptcy.

But you’re not going to try to take out your own appendix after reading “Your Friend, Your Appendix”, so please don’t think about filing without a lawyer, wherever you may be. Bear in mind that lawyers who file bankruptcy normally use lawyers to file their bankruptcy, because when a lawyer represents himself….Well, you get the idea.

The above does not constitute legal advice and may not be relied upon for legal advice; seek the advice of your own professional in your own jurisdiction prior to making important decisions.

p.s. as I write this postscript, there is a raging debate in Congress over a provision in the Bankruptcy Code that may, after amendment, permit the stripdown of some OR all mortages on residential real property. Will that statute pass? Listen, I’ve practiced bankruptcy law in Phoenix, Arizona for about thirty years, and I’ve watched a long series of amendments to the “New Code” of 1979; and I’ve watched as Congress debated in the past. The 2005 amendments took about a decade to work their way through Congress. So MAYBE the Bankruptcy Code is about to change a lot. And MAYBE it’s not. But if you’re contemplating bankruptcy in Phoenix, Arizona, or anywhere else, you should be aware that the law is currently MAYBE about to change in a way that could be helpful to debtors, IF they qualify and are willing to put up with a Chapter 13 bankruptcy (which makes a root canal look like fun).

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