Changes to bankruptcy laws have made it more difficult to file for bankruptcy. They have changed who can file bankruptcy and they have changed how some Chapter 13 bankruptcy debtors must live on less money than they did previously.
Under previous bankruptcy rules, a debtor could openly choose whether he wanted to file for Chapter 7 bankruptcy liquidation or Chapter 13 bankruptcy repayment. It was truly up to the individual filer. Under the new bankruptcy rules, those who earn higher incomes must pay at least some of their debts in a Chapter 13 bankruptcy repayment plan.
In addition, those wishing to file for bankruptcy under Chapter 7 must earn a monthly income that is lower than the median average income for a resident of New Jersey. If the debtor’s income is determined to be greater than the New Jersey median income, it must be determined if he has enough disposable income to pay back the debt under a Chapter 13 repayment plan. Those filing for bankruptcy under Chapter 13 under the new bankruptcy rules must live on a lower percentage of their monthly income than they were required to under the old bankruptcy rules.
Debtors filing for bankruptcy under the new bankruptcy rules are also required to attend two separate credit counseling courses. The first course is meant to help you decide whether you really need to file for bankruptcy. This course also helps you decide which chapter of bankruptcy is best for your financial needs.
The second credit counseling course needs to be completed at the end of the bankruptcy case. This counseling course is meant to help the debtor improve the management of his personal finances. Under the new bankruptcy laws, no bankruptcy may be discharged until proof of attendance in both these credit counseling classes is shown to the trustee.
Because bankruptcy filings have become more complicated, bankruptcy attorneys must put in more work for their clients. The new credit counseling and median income rules have created more work for those filing, making it more necessary than ever before for the debtor to acquire a qualified Morris County bankruptcy lawyer. Under the new bankruptcy rules, the Morris County bankruptcy attorney representing the debtor must personally vouch that all information submitted to the bankruptcy court is true and accurate.