Livermore Bankruptcy Attorney | Livermore Bankruptcy Lawyer

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was passed by Congress and signed into law by President Bush in April 2005. The majority of changes instituted by this new law took effect on October 17, 2005.

Below are the major technical changes of the 2005 Bankruptcy Law:

Mandatory Credit Counseling

Prior to filing any bankruptcy case in Northern California, one must now complete a credit counseling course online or over the phone. Counseling generally costs $50.00, but must be given free of charge if you don’t have the ability to pay. The mandatory credit counseling course usually lasts 45 to 60 minutes, and can be taken usually 24/7. A certificate will be issued upon completion and must be provided to our office as a condition of filing your case. Failure to timely file the certificate of completion results in an automatic case dismissal. Most of our clients have indicated so far that they found the course very enlightening and educational. Moreover, studies thus far have indicated that 97% of all debtors taking the counseling courses have been specifically advised by the counseling organizations that they cannot help them and that they should file bankruptcy.

Means Test

This new test looks to the past 6 months income and has mandatory expense deductions, most people will qualify.

Tax Returns

In a Chapter 7 bankruptcy filing, a debtor is required to submit the previous year's tax return, but only if they filed a return. If they did not file a return, a declaration is submitted instead. In a Northern California Chapter 13 bankruptcy filing, the debtor is required to submit the last 2 years tax returns, and possibly up to the most recent 4 years of tax returns, depending upon the circumstances.

Mandatory Debt Management

Just as with Credit Counseling, a debtor is now required to undergo a Debt Management Course after the bankruptcy case is filed. The same fees and time frames apply as with Credit Counseling.

Time Periods

The following time periods now apply between bankruptcy filings (start date is date of filing the case, not date the of discharge):

Chapter 7 to Chapter 7: 8 years
Chapter 7 to Chapter 13: 4 years
Chapter 13 to Chapter 7: 4 years or 7 years depending on the circumstances
Chapter 13 to Chapter 13: 2 years

The new bankruptcy laws now require proof of 6 months' pay stubs to document income. Ironically, they call this current income, but has nothing to do with your actual income on the date your case is filed.

Non-dischargeable Debts

The new bankruptcy laws have now made certain debts non-dischargeable that were dischargeable under the old laws. However, unless you have committed acts of fraud or other malfeasance, you don’t need to worry about this change.

Attorney Verification

If you lie, make a misrepresentation, fail to disclose an asset, or commit any other false oath in your bankruptcy schedules, we can be sanctioned just like you. The new laws now require us to assume you are lying or we will be sanctioned. So, we will be asking you to fill out and provide a substantial number of documents to satisfy the new bankruptcy laws.

Exemptions

Exemptions are what allow a debtor to keep property in a bankruptcy proceeding. Under the new bankruptcy laws, we must use the exemptions in the state you resided in the past 2 years. If you resided in more than one state over the past 2 years, then we must use the exemptions in the state you resided in for the majority of the time for 2.5 to 2 years ago. For most people, this new law has no impact on the outcome of their bankruptcy case.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.