What is the Bankruptcy Abuse Prevention and Consumer Protection Act?

On April 14, 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which was signed six days later by President George W. Bush. This act consists of changes to the U.S. Bankruptcy Code. 

Credit Counseling

Anyone planning to file bankruptcy must contact a government-approved credit counseling program within 180 days prior to filing for bankruptcy. Also, the person filing must complete a debtor education course, which lasts between 45-90 minutes and can be taken over the phone or online. 

Tax Returns & Proof of Income

You must provide the Trustee or Court with copies of your federal tax returns from the last year filed. Also, you have to provide copies of paystubs for the 60 days prior to your case being filed. 

Domestic Support Obligations 

Domestic Support Obligations include alimony, child supports and property distribution, in which these are given priority over just about every other creditor. 

Means Test

This is a test to determine if a person is financially eligible for filing for Chapter 7 bankruptcy. Speak to a bankruptcy attorney to determine if you are financially eligible as this depends upon your household income in your state. 

Time Restrictions 

If you received a Chapter 7 discharge in the previous 8 years, you cannot file for Chapter 7 bankruptcy.

Although these new measures may seem to add more work to filing for bankruptcy, working with an experienced bankruptcy attorney in Jacksonville will help you understand and go through the process as quickly and hassle free as possible.

www.saratremellaw.com blog 062911

www.saratremellaw.com blog 062911

The Bankruptcy Code: Chapters 7 & 13

With today's economic hardships, filing for bankruptcy doesn't sound alarming. In 2010, a total of 1,596,355 people filed for bankruptcy, according to statistics by the Administrative Office of the U.S. Courts. This number is nearly a 14% increase from the 1,402,816 bankruptcy cases filed in 2009.

Bankruptcy laws help those who cannot pay off creditors by selling assets or forming a repayment plan in order to pay off debts. Cases vary in justifying the need to file for bankruptcy, one of the most common being high debt due to not being able to pay off a mortgage, medical bills, student loans or auto loans, for example. Other reasons for filing for bankruptcy include unfortunate circumstances, such as a sudden illness or a natural disaster, or economic hardships such as losing a job unexpectedly. In addition, poor decisions such as gambling can lead to bankruptcy.

As written in Article I, Section 8 of the U.S. Constitution, Congress is authorized to enact "uniform Laws on the subject of Bankruptcies." In 1978, Congress enacted the "Bankruptcy Code," which is the uniform federal law governing all bankruptcy cases.  According to the U.S. Department of Justice, the majority of bankruptcy cases are filed under Chapter 7 or Chapter 13 of the Federal Bankruptcy Code.

Chapter 7 bankruptcy is usually filed by those who have a large amount of debt, such as credit card or medical bills, or those who are in debt due to unemployment. In such a case, a person or a company's assets are liquidated in order to pay off creditors. Chapter 13 bankruptcy is an individual debt adjustment in which the person in debt follows a specific plan to repay creditors over a period of time. Unlike Chapter 7, a person who files Chapter 13 bankruptcy will not have to turn over valuables. However, Chapter 7 allows an individual to be immediately discharged from debt and Chapter 13 requires a person to make payments under the set plan before a discharge can be received.

Because bankruptcy is a complex legal system, it's important to choose a reliable bankruptcy attorney to help you in the process. Whatever your reason for filing for bankruptcy, a Jacksonville bankruptcy attorney from the Law Office of Sara Tremel will help you throughout the entire process.  

If you are facing bankruptcy and would like to speak to a consultant, contact us today.