What changes were recently made to the bankruptcy laws?
The “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” was passed by congress in Spring of 2005 and will take effect on October 17th, 2005. The intent of the act was to force people who can afford to make some of the payments on their debt make those payments rather than avoid the debt all together. The major changes are: • Means Test: Tests are performed to identify the ability of the debtor to pay their debts. The tests are: Is the family earning above the average income for their state? If yes, does the family have enough excess income to pay some or all of their debts. • Proof of Income: Debtors wishing to filing for bankruptcy must provide the government with their most recent tax return. • State Exemptions: A minimum 2 year residency is required to take advantage of state exceptions. • Counseling: Debtors must have completed a federally approved credit counseling program within the six months prior to filing. • Child Support and Alimony: Child support and Alimony p
