What kinds of changes will the new Bankruptcy law make?
The new bill contains dozens of changes to the Bankruptcy law. The most important changes that effect Chapter 7 and Chapter 13 consumer bankruptcies are as follows: Under the current system, most debtors can file a Chapter 7 Bankruptcy to wipe out most unsecured debts entirely. While some debts, such as child support, alimony, some taxes and student loans cannot be discharged, other unsecured debts, such as credit cards and personal loans can be discharged completely for debtors without sufficient income to pay their debts. The new Bankruptcy law is fundamentally different. Essentially, the new law imposes an income or “means” test on people who need to file Bankruptcy. Simply stated, if you make over a minimum income, you will not be able to discharge your debts in a Chapter 7 Bankruptcy EVEN IF YOU DO NOT HAVE ENOUGH MONEY TO PAY YOUR DEBTS. Instead, the new Bankruptcy law will require many debtors who can now discharge their debts to pay their creditors 25% of their total unsecured
