Bankruptcy protections for individuals were legally established several decades ago. Occasionally, federal and state bankruptcy laws are updated. Talk to your attorney to find out how the most recent changes might affect your case. One of the major overhauls to bankruptcy law was enacted in 2005: The Bankruptcy Abuse Prevention and Consumer Protection Act (BABCPA). BABCPA was intended to make it a little more difficult for people to file for bankruptcy protection. This underscores the importance of having a lawyer guide you through the process.
Your attorney will need to know if you’ve moved within the past few years. This can influence your bankruptcy exemptions. If your permanent home for the past two years is in the same state as where you’re filing the petition, then you can use that state’s exemptions. If you moved to the state fewer than two years ago, but longer than 91 days ago, then you may need to use the exemptions applicable to your previous residence.
If you intend to file for Chapter 7, BABCPA requires you to pass a means test. Your attorney will make these calculations to determine your eligibility. The means test involves comparing your income, less allowed expenses, to the median income for your state.
BABCPA also adjusted the waiting periods between bankruptcy filings. It is possible to file for bankruptcy more than once, but you’ll need to wait eight years after previously receiving a Chapter 7 discharge. If you received a Chapter 13 discharge, you’ll need to wait six years before you can file again.
Most people who consider filing for bankruptcy do so because they encountered financial problems beyond their control, such as a major illness. Despite this, BABCPA requires debtors to complete two financial education courses. Before you file, you must complete an approved credit counseling course. After you file, you must complete an approved personal financial management course.
When you become a client of Cutler & Associates, Ltd., we’ll take the time to understand your unique situation because we firmly believe that you deserve excellent legal guidance and representation. During your bankruptcy evaluation at our law firm in Aurora or Skokie, we can answer any questions you may have about BABCPA or state bankruptcy laws. Get in touch today at (847) 961-4572.