Bankruptcy Basics: What About the New Bankruptcy Law?

13 Feb Bankruptcy Basics: What About the New Bankruptcy Law?

What About the New Bankruptcy Law?

On October 17, 2005, the newly adopted Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) took effect. This 500 page bill makes significant changes to the bankruptcy law. Among the many changes are:

  • A Means Test, which applies a formula, based on your average income for the six months before you file for bankruptcy and IRS-determined expenses, to determine whether you will be eligible to file for Chapter 7. The means test applies only to the poor and middle class, and only to those with mostly non-business debt.
  • A requirement that you obtain a certificate of credit counseling from an approved credit counselor no more than 180 days before your case is filed, and take a credit education course after your case is filed before you can receive a discharge.
  • Requirements that consumer bankruptcy attorneys who represent the poor and middle class call themselves “Debt Relief Agencies,” and provide written Consultation Agreements and lengthy disclosure notices within three days after receiving a communication from someone who may become a client. You can read our Initial Consultation Agreement (for a free consultation) and these notices by clicking here.
  • Certain types of debt that were dischargeable in Chapter 13 cases, such as unfiled taxes, intentional torts and fraud, and certain domestic support obligations, no longer can be discharged.
  • Extensive document filing requirements (such as filing with the Court paystubs for the previous six months and tax returns or transcripts for the previous four years).
  • Restrictions on repeat filers.
  • Restrictions on your ability to “cram down” secured debt, so that you only have to pay the value of the item instead of the full balance.
  • Requirements that domestic support obligations be kept current during a Chapter 13 case, and be current to receive a discharge.

Please be assured that bankruptcy relief is still available, both under Chapter 7 and Chapter 13. We have been active in analyzing and modeling the new law, and are fully prepared to help you steer your way through its many changes.

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Brett Weiss, a senior partner at Chung & Press, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his law partner, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute, the Bankruptcy Bar Association of Maryland, and the Civil Justice Network. He has been recognized as a “Super Lawyer” every year since 2007 for Maryland and the District of Columbia, and in 2011 received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, The United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.
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