New Bankruptcy Law Makes It More Difficult To Go Bankrupt
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Bob Miles
Apr 19, 2013, 1:30:04 PM4/19/13
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Please consider this free-reprint article written by:
Bob Miles
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Article Title: New Bankruptcy Law Makes It More Difficult To Go Bankrupt
Author: Bob Miles
Word Count: 386
Article URL: http://www.isnare.com/?aid=144186&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=144186
Easy Publish Tool: http://www.isnare.com/html.php?aid=144186
*********************** ARTICLE START ***********************
Disclaimer: The following article meant for reference only, and is not intended to be legal advice. Be sure to consult a lawyer for a full explanation.
The Bankruptcy Abuse Prevention and Consumer Protection Act was became effective on October 17, 2005 (except for a few provisions). This amendment to the Bankruptcy Code is a major revision of the 1978 Bankruptcy Code and deals mainly with consumer bankruptcy. It was passed in response to rising bankruptcy filings and is based on a concept of increased personal responsibility. This article offers a very brief explanation of the �means test� that is designed to dump some debtors out of Chapter 7 and into Chapter 13:
Most debtors would of course prefer to discharge their debts under Chapter 7 rather than pay into Chapter 13. For debtors with the ability to pay, however, this will not be nearly as automatic as before. Under the previous version of the Bankruptcy Code, a finding of "substantial abuse" had to be made before a debtor was barred from Chapter 7 relief. Under the new law, this standard is reduced to "abuse" (one act of abuse is sufficient rather than �substantial� abuse). Abuse is now presumed for debtors deemed to have the means to pay into Chapter 13. This means test applies to debtors net current monthly incomes greater than their state's median income.
The means test has two prongs:
1. If the debtor�s net monthly income after deductions is at least $166.67, the debtor is presumed to be ineligible for Chapter 7 relief.
2. If the debtor�s net monthly income is at least $100 and the debtor is deemed to have the means to pay at least one-fourth of his/her unsecured debt over 5 years, then the debtor is presumed to be ineligible for Chapter 7 relief.
What all this means is that debtors who file under Chapter 7 will be forced to pay as much as they can under Chapter 13 if they can afford to unless they can prove that they are not abusing the system by filing under Chapter 7 . The word �presumed� simply means that whatever is presumed will be taken as true unless proven otherwise - the burden of proof has switched to the debtor to prove there is no abuse rather than on the government to prove "substantial abuse" as before.
About The Author: �Bankruptcy� at http://bankruptcyguide4u.blogspot.com offers readers comprehensive information about bankruptcy, including bankruptcy loans. See also http://bankruptcyguide4u.blogspot.com/2007/03/means-test-and-presumption-of-abuse.html.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=144186
*********************** ARTICLE END ***********************
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Message delivered directly to members of the group:
publish-the...@googlegroups.com
*****************************************************************
Please consider this free-reprint article written by:
Bob Miles
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=144186
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=144186
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: New Bankruptcy Law Makes It More Difficult To Go Bankrupt
Author: Bob Miles
Word Count: 386
Article URL: http://www.isnare.com/?aid=144186&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=144186
Easy Publish Tool: http://www.isnare.com/html.php?aid=144186
*********************** ARTICLE START ***********************
Disclaimer: The following article meant for reference only, and is not intended to be legal advice. Be sure to consult a lawyer for a full explanation.
The Bankruptcy Abuse Prevention and Consumer Protection Act was became effective on October 17, 2005 (except for a few provisions). This amendment to the Bankruptcy Code is a major revision of the 1978 Bankruptcy Code and deals mainly with consumer bankruptcy. It was passed in response to rising bankruptcy filings and is based on a concept of increased personal responsibility. This article offers a very brief explanation of the �means test� that is designed to dump some debtors out of Chapter 7 and into Chapter 13:
Most debtors would of course prefer to discharge their debts under Chapter 7 rather than pay into Chapter 13. For debtors with the ability to pay, however, this will not be nearly as automatic as before. Under the previous version of the Bankruptcy Code, a finding of "substantial abuse" had to be made before a debtor was barred from Chapter 7 relief. Under the new law, this standard is reduced to "abuse" (one act of abuse is sufficient rather than �substantial� abuse). Abuse is now presumed for debtors deemed to have the means to pay into Chapter 13. This means test applies to debtors net current monthly incomes greater than their state's median income.
The means test has two prongs:
1. If the debtor�s net monthly income after deductions is at least $166.67, the debtor is presumed to be ineligible for Chapter 7 relief.
2. If the debtor�s net monthly income is at least $100 and the debtor is deemed to have the means to pay at least one-fourth of his/her unsecured debt over 5 years, then the debtor is presumed to be ineligible for Chapter 7 relief.
What all this means is that debtors who file under Chapter 7 will be forced to pay as much as they can under Chapter 13 if they can afford to unless they can prove that they are not abusing the system by filing under Chapter 7 . The word �presumed� simply means that whatever is presumed will be taken as true unless proven otherwise - the burden of proof has switched to the debtor to prove there is no abuse rather than on the government to prove "substantial abuse" as before.
About The Author: �Bankruptcy� at http://bankruptcyguide4u.blogspot.com offers readers comprehensive information about bankruptcy, including bankruptcy loans. See also http://bankruptcyguide4u.blogspot.com/2007/03/means-test-and-presumption-of-abuse.html.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=144186
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
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