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THE NEW BANKRUPTCY LAW

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America Debt Resolutions an A+ Rated Company, and its debt relief partners specialize in helping consumers review multiple debt relief programs, such as credit card debt consolidation, debt management, credit counseling, and includes a debt settlement program with NO FESS PAID IN ADVANCE. We guarantee you will not pay any fees for the services until our negotiators have successfully settled/resolved a debt for you.

Important information that you need to know.

The New Bankruptcy Law

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Prior rules under Chapter 13 required people to dedicate all of their disposable income (what they had left after paying their actual living expenses) to their repayment plan. Unfortunately, the new law requires you to cover all your bases. Although Chapter 13 filers still have to hand over all of their disposable income, they have to calculate their disposable income using allowed expense amounts dictated by the IRS and not their actual expenses. If their income is higher than the median in their state, these expenses are often lower than actual costs.

These permitted expense amounts subtract from the filer’s actual earnings each month, not from the filer’s average income during the six months before filing. This means that debtors may be obligatory to pay a much larger amount of “disposable income” into their plan than they actually have to spare every month, which, in turn, means that many more Chapter 13 plans will fail.

Under the new law, you must value your property at what it would cost to replace it from a retail vendor, taking into account the property’s age and condition. This requirement is sure to raise the value of property, which means more debtors stand to have their property taken and sold by the trustee.

Furthermore, the financial impact is severe; a bankruptcy will stay on your credit report for 10 years. Every time you apply for employment, credit, whether it is a home, a car, a lease, or insurance, you are impacted. The long-term effect of higher rates many times greatly outweighs the short-term impact of filing bankruptcy. Most people do not realize that bankruptcy can stay on their court records for over 20 years, which means it can follow someone for the rest of their life. If you apply for a job, a loan, rent an apartment, or even insurance your bankruptcy filing is easily uncovered.

Not all debts discharge through bankruptcy, such as:

  • Debts resulting from fraud

  • Alimony

  • Fines from traffic tickets or debts that result from criminal negligence

  • Debts from willful or malicious injury to another person or their property

  • Child Support

  • Student Loans

(Currently, student loans cannot be discharged unless the individual passes an undue hardship test. The individual has to prove that they made good faith efforts to repay the loan and prove that they cannot maintain a minimal standard of living if you were forced to repay the loan)

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