The new bankruptcy law establishes stricter criteria for filing Ch. 7 bankruptcy cases. A debt can typically be discharged in a Ch. 7 bankruptcy case if it is unsecured, which means there is no property securing the debt. Unsecured debts include, but are not limited to, credit card debt, medical bills and most personal loans. A Ch. 13 bankruptcy case involves a three to five year repayment plan. To qualify for Ch. 13, you must have a regular source of income, have enough disposable income, and your debts may not exceed a certain amount.
The new bankruptcy law created an income-based test for measuring a debtor's ability to repay debts. Under the “means test,” debtors with insufficient income in proportion to their debts can still file a Ch. 7 bankruptcy, which erases your unsecured debts entirely under most circumstances. The means test compares the debtor’s excess monthly income to the amount of unsecured debt to determine how much a debtor could repay to creditors in a Ch. 13 bankruptcy. Because this calculation is hypothetical and does not necessarily reflect the debtor’s true financial condition, a debtor who appears to be able to repay the minimum portion of his debts but who, in reality, cannot, may be permitted to file under Ch. 7. Unfortunately, the means test is more complicated than we can explain well here.
The new bankruptcy law requires every debtor filing for protection under Ch. 7 or Ch. 13 of the U.S. Bankruptcy Code to take a credit counseling course before filing and a financial management course after filing. These courses are set up for you in our law office and may be taken online or by phone. The credit counseling course takes approximately 1-hour to complete and the financial management course takes at least 2-hours to complete.
When you are filing a bankruptcy, it is critical to understand your legal rights. The attorneys at The Law Office of Donald E. Hood, PLLC personally meet with every client for the initial consultation to determine the appropriate course of action.
If you require assistance with a personal or business bankruptcy filing and require the assistance of experienced bankruptcy attorneys in the Dallas/Fort Worth Metroplex, please call the attorneys at The Law Office of Donald E. Hood, PLLC today at (214) 234-0529. We provide a FREE consultations and offer affordable payment plans.
