Is It Harder To File For For Bankruptcy Now?
By Susanne Robicsek, North Carolina Bankruptcy Attorney on Mar 8, 2007 in General Bankruptcy Information
The bankruptcy laws were changed in 2005 to keep people from abusing the system, but the changes are making it harder for everyone to file, including all the honest and hardworking people who are looking for help and protection under the bankruptcy laws.
For most people, the reason it is harder is not because the changes keep more people from filing, but because the paperwork is so much more complex that is it just more difficult to do so.
There are so many misunderstandings about the new bankruptcy law. Many people have heard that the new bankruptcy law keeps people from filing bankruptcy at all. Others have heard that you can’t file Chapter 7, only 13.
There is no easy answer, but what attorneys are seeing is that people who could file for bankruptcy under the old law are mostly able to file under the new law too.
Under the old law, people who had discretionary income were supposed to file Chapter 13 instead of Chapter 7. The new law requires that too, but now the government applies their own formula (called the “means test“) in addition to looking at what people really spend. The means test supposedly determines if someone should have the discretionary income, or the “means” to repay their debts.
Even with this new test, if people don’t have the ability to pay their debts then bankruptcy is still a good option to consider, even with more burdensome paperwork.
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