Bankruptcy law was substantially changed on October 17, 2005.
Its sponsors called it “reform”; regulars in the field are more likely to call it “deform”.
Despite the changed details, bankruptcy remains valuable and available.
BAPCPA, the bill that amended the Bankruptcy Code, introduced new barriers and make-work to filing and whittled away some of the relief available to debtors.
But the underlying structure of the Code is unchanged and bankruptcy relief remains available to most people.
Subsequent experience with the bill, however, suggests that far more remains the same than has changed.
Some of the changes:
- Means test: governs eligibility to file Chapter 7
- Super discharge in Chapter 13 shrinks
- Cramming down liens on cars purchased within 2 1/2 years was barred, in some cases
- Family law support claims elevated in priority
- Interval between bankruptcy cases lengthened
- Debtor’s duties in bankruptcy expanded
What do these changes mean to you if you are considering filing bankruptcy?
First, it means that information about bankruptcy you find on the internet may be outdated. Even material that reflects the changes in the law is often oversimplified, and not infrequently, flat wrong.
Second, it means that your bankruptcy lawyer needs to be a specialist or someone who does a substantial amount of his/her practice in this field of law. The era where an attorney could do a few bankruptcy cases a year, and produce a credible result for the client, are over.
Finally, it means that filing bankruptcy requires jumping through more, largely meaningless hoops to get a discharge. The amended Code is larded with relatively simple tasks that the debtor must perform, on a schedule, or have his case dismissed.
The bankruptcy discharge is still available; attention to details in the filing and support from a skilled bankruptcy lawyer will get you through.
Legal issues and bankruptcy questions are frequently complex and individual. The information contained here is intended to be educational only: it is not legal advice nor does it create an attorney client relationship between the viewer and the firm. You should consult with a bankruptcy attorney licensed to practice in your state for advice about your particular situation.
Image courtesy of Gabriel Villena.