The American congress made some significant changes to the bankruptcy laws. Such changes include reducing the relief provided in the chapter 13 bankruptcies and restricting the discharge of chapter 7 bankruptcies. The bill came into process from October 17 - 2005.
There are indeed sweeping changes made to bankruptcy laws. But how the trustees and lawyers will interpret it is uncertain. There is a big deal of uncertainty involving such changes in bankruptcy law. The process of bankruptcy is now much more costly for the debtors and the court system is more intricate. The debtors have to go through more hurdles before declaring themselves bankrupt.
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Previously one was not required to go through a means test. Now much alike the Michigan and Ohio bankruptcy law one has to go through a means test. The means test determines how one will file for bankruptcy.
The bankruptcy law changes have increased two years between chapter 7 discharges. There is no change made to chapter 13 but chapter 11 has been made more complex and costly.
The bankruptcy law changes have made it more uncertain for the debtor to get immediate protection. The automatic stay has been conditioned and hedged for different conditions. Certain documents like drivers license, professional license etc can be taken away even if the stay notice is ordered. Landlords can evict tenants even if he has the stay notice. Those creditors who are removed from creditors list can carry on with their recovery spree.
Debts are now made more non-dischargeable. More debts are now non-dischargeable under chapter 7. Education and student support loan are now made dischargeable.
The new law includes and implements certain duties. These duties are implemented both on the attorneys as well as the debtors. If they fail to pay off such duties timely then their cases will be cancelled and the cover of automatic stay will be of no use. Cases of mistakes, misfortunes, inattention has been taken more seriously in the bankruptcy-law changes. The court and the trustees are now more guide lined and are restricted by law. The previous notion that the law provides relief to debtors is taken over by the presumption that the law states debtor to be abusive until the debtors proves it to be worth.
The bankruptcy law changes are new and how it will work or not will be accessed in the future.
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