Why The Switch?
Prior to the passage of the new laws in 2005, it was relatively simple to file for Chapter 7 bankruptcy, and there were few regulations in place to prevent many people from doing so despite their ability to repay their debts. In order to weed out individuals who were not entirely financially insolvent, stricter Chapter 7 eligibility requirements were enacted. In addition, the laws added a number of new requirements for debtors participating in the process in an effort to reduce the likelihood that they will need bankruptcy protection in the future.
What Are The Alterations?
The most significant modification is the addition of a Chapter 7 means test. This test compared the income of the debtor to the state's median income level. Those whose income is less than the state's median income may qualify for Chapter 7, while those whose income is greater than the state's median income may qualify for Chapter 13.
Additionally, the new bankruptcy laws increased the associated petition fees. The average cost of filing a Chapter 7 case has increased to approximately $306 from $299 prior to the 2005 amendments. Chapter 13 filings now cost approximately $281, up from $274 in prior years.
In order to obtain a successful discharge of debts, the debtor must now complete additional stages as a result of the 2005 amendments to the bankruptcy code. The credit counseling course requirement, which requires debtors to attend and complete a 90-minute educational course, is the most significant addition. This course focuses on financial management skills, prudent credit usage, and debt relief options. Once completed, the certificate of completion must be submitted to the court within 180 days of the discharge.
Additionally, debtors must submit copies of their paycheck receipts and bills or bank statements as evidence of their expenses. Additionally, the new law requires a debtor to have filed tax returns for at least three years prior to filing.""
" - https://www.affordablecebu.com/
