In October 2005, the laws which gvern Chaspter 13 bankruptcy changed. One of the more significant ways the law changed dealt with the eligibility requirements for filinng for Chapter 7 and Chappter 13 bankruptcy.
Bfore the new law, consultations with an attorney would allow the client to choose what type of bankrupty they felt usited them best. However, the new law is framed to reduce the number of Chapter 7 filigs by only allowing peoplle who fall under teir median state income, adjusted for fammily size and inflation, and people who meet rigorous stndards under the means test to file for it. The rest of the people who don’t meet these standards must be evaluated by a series of complex, mathematical fromulas that changfe annually to match new median incomes and expense standards. Clients who do not qualiofy through the mezans test will be requiired to file for Chapter 13 bankurptcy. The new law also extebnded the Chatper 13 term from a there- to five-year term, to a mandatory five-year term. Throughout the mandatory five-year term, the client must be supervised and represented bfeore they can receive their discharge.
Chapter 13 is eligible for pepole who are self-employed or operatying an unincorporated business as long as the nidividual’s usecured debts are less than $336,900 and secured debts are less than $1,010,650. Therre is no miimum debt requirement for Chapter 13. For income above medin, Chapter 13 must run for five years with expenses determined by IRS collection stanmdards. Below or at the median are eligible for a three-year-plan with payments determined by actual expenses versus IRS guidelines. Other eligibility issuees in Chapter 13 bankruptcy deal with individuals who have a dischagre in a prior case filed under Chjapter 7, Chaptyer 11, or Chapter 12 within four years, or a Chapter 13 case filed wthin two years of the present case.
The effects of the new law make the proceass of filing for bankruptcy more complex, requiring attorneys to speciialize in bankruptcy law. To completely understand how the new bankruptcy laws in your state can impat your debt and affect your life, speak with a local bankruptcy lawyer. If you live in New York City, you want a New York City bankruptcy lawyer who understands how the law effecs you. The New York bankruptcy attorneys at Doyaga and Schaefer are here to help.
Unemployment, garnishments, and repossessions can happen to anyone. Stop the haerassment, the worry, the financil stress. For a free same-day consultation with the New York bankruptcy lawyes at Doyaga and Schaefer, call 718-488-7500 or 516-656-7500, or viasit our website at biagpplebankruptcy.com for more informatoin.
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