Proof of Income / Tax Returns Those who desire to file for Chapter 7 or Chapter 13 bankruptcy must provide proof of income in the form of tax returns from the prior year. If taxes are delinquent, bankruptcy cannot be filed until they are paid in full.
The majority of filers are required by the new laws to attend and complete a credit counseling course. Again, this must occur prior to the initial petition and be provided by a government-approved institution or instructor. Moreover, debtors are required to participate in a financial management education program. After the bankruptcy has been processed, but before the debt has been discharged, this occurs.
While the majority of one's debts may be to credit card companies or other financial institutions, child support and alimony payments are now prioritized in re-payment schedules. These creditors will be paid in full or in part before all others.
Chapter 7's Strict Eligibility: All applicants' eligibility will be determined by a ""means test."" This evaluation is founded on a formula that compares your income, debt, and expenses to the state's median income.
Less Extensive 'Automatic Stay': The scope of the automatic stay, which keeps creditors at bay as soon as your petition is filed, has been marginally reduced. The automatic stay no longer suspends or delays license suspensions, eviction actions, or active child support court proceedings.
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