Resolve Legal PLLC - Bankruptcy Law Changes

1. Increased Filing Fees
Currently, the filing fee is $299 for a Chapter 7 and $274 for a Chapter 13. Chapter 11 filing fees have been increased to $1,039. These fees have increased twice since passage of BAPCPA.

2. Means Test for Chapter 7 Eligibility

Under the new bankruptcy law, you may not be eligible for Chapter 7 bankruptcy if your average income over the past six months is higher than the Washington state average for a household of your same size. You will be presumed to be abusing the bankruptcy system if, after deducting your allowed expenses (as determined by IRS standards) from your average income over the past six months, you have disposable income (which may not be equal to your actual disposable income) that would allow you to pay $100 per month to a Chapter 13 plan. Debtors who meet this new standard would be shifted to 5 year repayment plan in Chapter 13. The presumption of abuse may only be rebutted by demonstrating “Special circumstances that justify additional expenses or adjustments of current monthly income. In practice, very few debtors are precluded from filing a Chapter 7 under the new law.

3. Mandatory Credit Counseling
While credit and budget counseling is a good idea, is was not required as a condition to filing a bankruptcy prior to BAPCPA.

Under the new bankruptcy law, you may not file a bankruptcy case unless you have received credit counseling from an approved nonprofit budget and credit counseling agency within 180 days prior to filing.

4. Mandatory Debtor Education
Under the new bankruptcy law, you can be denied your discharge, under both Chapter 7 and 13 if you have not completed an education course in personal financial management.

5.Time Between Discharge in a New Case
Under the new bankruptcy law, you cannot receive a new Chapter 7 discharge for eight years after you received a discharge in a prior Chapter 7.

6.Exemptions
Your state exemptions were based upon the state of domicile, which is typically the state where you currently live.

Effective April 2005, which state exemptions you may choose is now based upon a complex formula of which state you have lived in the longest during the previous two years. If you have recently moved to Washington from another state, which state exemptions apply may be different.

7.Documents and Schedules to be Filed
Under the new bankruptcy law, you must file your bankruptcy petition, schedules of all of your assets and liabilities, and a statement of financial affairs. In addition you must file a certificate showing that received credit counseling, proof of the amount of wages you received from your employer within the last 60 days before you filed your bankruptcy case, statement of monthly net income and any anticipated increase in income of expenses after filing, tax returns or transcripts for the most recent tax year and any that are due after you have filed and a photo ID, among other items. Failure to provide the documents within 45 days after the petition has been filed (with a possibility of a 45-day extension) results in automatic dismissal of the case after the time period has passed.

8. Domestic Support Obligations
Most Spousal and Child support obligations were already non-dischargeable. Some forms of property settlements could be discharged under very narrow circumstances.

Under the new bankruptcy law, all Domestic Support Obligations are non-dischargeable, including support assigned to a state agency. In addition, you will have to provide the trustee with information about how to contact your former spouse.

9. Super Discharge under Chapter 13
Certain obligations that might have been non-dischargeable in a Chapter 7 case could sometimes be discharged in a Chapter 13 upon completion of the Plan under the old law.

Under the new bankruptcy law, the super discharge of a Chapter 13 case is not so super anymore. Debts for trust fund taxes, including state taxes, taxes for which returns were never filed or filed late, taxes for which the debtor made a fraudulent return or evaded taxes; fraud and false statements under §523(a)(2), unscheduled debt under §523(a)(3), defalcation by a fiduciary under §523(a)(4), domestic support payments, student loans, drunk driving injuries, criminal restitution and fines and civil restitutions or damages rewarded for willful or malicious personal actions causing personal injury or death are now excepted from discharge.

10. Asset Protection Trusts
Under the prior federal and Washington state law, transfers of your property to a trust could be reviewed if those transfers occurred within 4 years of your bankruptcy filing

Under the new bankruptcy law, a trustee can avoid any transfer of your property, made within 10 years of the bankruptcy filing, if the transfer was made to a self-settled trust or similar device by the debtor for the benefit of the debtor and the transfer was made with the actual intent it hinder delay or defraud any of your creditors

11. Tax Returns
There were no requirements that all tax returns be filed as part of your bankruptcy under the old law. Many judges would not confirm a Chapter 13 plan if your tax returns are not filed.

Under the new bankruptcy law, you must file all of your back tax returns before the first meeting of creditors, with one short extension. You must provide a copy of your latest tax return or a transcript at least 7 days before the meeting of creditors or the case “shall” be dismissed.

12.Eviction Proceedings
Under the new bankruptcy law, the automatic stay will not prevent an eviction if the landlord had received a judgment from the court prior to filing, even though you may still be occupying the premises at the time of filing. The automatic stay will not prevent an eviction from going forward if you do not pay rent after you file. The automatic stay will not prevent an eviction from going forward if you have allowed any hazardous or illegal activity to occur in the premises.

13.Dischargeability of Student Loans
Previously, all student loans from governmental programs were non-dischargeable. Student loans from certain for profit institutions and non-governmental entities were dischargeable. Under the new bankruptcy law, all student loans from governmental programs, for profit institutions and non-governmental entities are non-dischargeable.

14.Automatic Stay for Multiple Filings
Under the new bankruptcy law, the automatic stay terminates 30 days after you file bankruptcy if you had one prior case dismissed during the past year. The automatic stay does not apply at all if you had two cases dismissed within the past year.

Click here to contact Resolve Legal.

HOME BANKRUPTCY INFO BANKRUPTCY ARTICLES CHAPTER 7 CHAPTER 13 CLIENT QUESTIONNAIRE BLOG ATTORNEY BIOS CONTACT US		MAJOR DIFFERENCES BETWEEN CURRENT BANKRUPTCY LAW AND THE NEW BANKRUPTCY LAW THAT AFFECT CONSUMERS In October, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA") went into effect. Many people believe that bankruptcy relief is no longer available, but that is not the case. Some of the most important changes from the old law are explained below. To learn more, contact us and schedule a complimentary initial appointment. 1. Increased Filing Fees Currently, the filing fee is $299 for a Chapter 7 and $274 for a Chapter 13. Chapter 11 filing fees have been increased to $1,039. These fees have increased twice since passage of BAPCPA. 2. Means Test for Chapter 7 Eligibility Under the new bankruptcy law, you may not be eligible for Chapter 7 bankruptcy if your average income over the past six months is higher than the Washington state average for a household of your same size. You will be presumed to be abusing the bankruptcy system if, after deducting your allowed expenses (as determined by IRS standards) from your average income over the past six months, you have disposable income (which may not be equal to your actual disposable income) that would allow you to pay $100 per month to a Chapter 13 plan. Debtors who meet this new standard would be shifted to 5 year repayment plan in Chapter 13. The presumption of abuse may only be rebutted by demonstrating “Special circumstances that justify additional expenses or adjustments of current monthly income. In practice, very few debtors are precluded from filing a Chapter 7 under the new law. 3. Mandatory Credit Counseling While credit and budget counseling is a good idea, is was not required as a condition to filing a bankruptcy prior to BAPCPA. Under the new bankruptcy law, you may not file a bankruptcy case unless you have received credit counseling from an approved nonprofit budget and credit counseling agency within 180 days prior to filing. 4. Mandatory Debtor Education Under the new bankruptcy law, you can be denied your discharge, under both Chapter 7 and 13 if you have not completed an education course in personal financial management. 5.Time Between Discharge in a New Case Under the new bankruptcy law, you cannot receive a new Chapter 7 discharge for eight years after you received a discharge in a prior Chapter 7. 6.Exemptions Your state exemptions were based upon the state of domicile, which is typically the state where you currently live. Effective April 2005, which state exemptions you may choose is now based upon a complex formula of which state you have lived in the longest during the previous two years. If you have recently moved to Washington from another state, which state exemptions apply may be different. 7.Documents and Schedules to be Filed Under the new bankruptcy law, you must file your bankruptcy petition, schedules of all of your assets and liabilities, and a statement of financial affairs. In addition you must file a certificate showing that received credit counseling, proof of the amount of wages you received from your employer within the last 60 days before you filed your bankruptcy case, statement of monthly net income and any anticipated increase in income of expenses after filing, tax returns or transcripts for the most recent tax year and any that are due after you have filed and a photo ID, among other items. Failure to provide the documents within 45 days after the petition has been filed (with a possibility of a 45-day extension) results in automatic dismissal of the case after the time period has passed. 8. Domestic Support Obligations Most Spousal and Child support obligations were already non-dischargeable. Some forms of property settlements could be discharged under very narrow circumstances. Under the new bankruptcy law, all Domestic Support Obligations are non-dischargeable, including support assigned to a state agency. In addition, you will have to provide the trustee with information about how to contact your former spouse. 9. Super Discharge under Chapter 13 Certain obligations that might have been non-dischargeable in a Chapter 7 case could sometimes be discharged in a Chapter 13 upon completion of the Plan under the old law. Under the new bankruptcy law, the super discharge of a Chapter 13 case is not so super anymore. Debts for trust fund taxes, including state taxes, taxes for which returns were never filed or filed late, taxes for which the debtor made a fraudulent return or evaded taxes; fraud and false statements under §523(a)(2), unscheduled debt under §523(a)(3), defalcation by a fiduciary under §523(a)(4), domestic support payments, student loans, drunk driving injuries, criminal restitution and fines and civil restitutions or damages rewarded for willful or malicious personal actions causing personal injury or death are now excepted from discharge. 10. Asset Protection Trusts Under the prior federal and Washington state law, transfers of your property to a trust could be reviewed if those transfers occurred within 4 years of your bankruptcy filing Under the new bankruptcy law, a trustee can avoid any transfer of your property, made within 10 years of the bankruptcy filing, if the transfer was made to a self-settled trust or similar device by the debtor for the benefit of the debtor and the transfer was made with the actual intent it hinder delay or defraud any of your creditors 11. Tax Returns There were no requirements that all tax returns be filed as part of your bankruptcy under the old law. Many judges would not confirm a Chapter 13 plan if your tax returns are not filed. Under the new bankruptcy law, you must file all of your back tax returns before the first meeting of creditors, with one short extension. You must provide a copy of your latest tax return or a transcript at least 7 days before the meeting of creditors or the case “shall” be dismissed. 12.Eviction Proceedings Under the new bankruptcy law, the automatic stay will not prevent an eviction if the landlord had received a judgment from the court prior to filing, even though you may still be occupying the premises at the time of filing. The automatic stay will not prevent an eviction from going forward if you do not pay rent after you file. The automatic stay will not prevent an eviction from going forward if you have allowed any hazardous or illegal activity to occur in the premises. 13.Dischargeability of Student Loans Previously, all student loans from governmental programs were non-dischargeable. Student loans from certain for profit institutions and non-governmental entities were dischargeable. Under the new bankruptcy law, all student loans from governmental programs, for profit institutions and non-governmental entities are non-dischargeable. 14.Automatic Stay for Multiple Filings Under the new bankruptcy law, the automatic stay terminates 30 days after you file bankruptcy if you had one prior case dismissed during the past year. The automatic stay does not apply at all if you had two cases dismissed within the past year. Click here to contact Resolve Legal.		CHAPTER 7 FAQ CHAPTER 13 FAQ BANKRUPTCY LAW CHANGES HELPFUL LINKS
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