The BAPCPA-Lawyers Modesto, CA

In October of 2005, congress passed the newest bankruptcy laws in an attempt to cut down the number of bankruptcy filings. The law they passed is known as the “Bankruptcy Abuse Prevention and Consumer Protection Act.” The law was written by credit card companies and banks and supported by the Bush administration. The law was so poorly drafted that nobody really knew how it would affect bankruptcy filings. Many bankruptcy attorneys left the practice because they believed bankruptcy filings would be drastically cut. In fact, in 2006, bankruptcy filings were the lowest they had been in years.

The creditors failed-Modesto Lawyers

As it turns out, the BAPCPA didn’t have the affect creditors had hoped for. Most everyone who was able to file for bankruptcy before, can still file now. The biggest difference is that filing for bankruptcy is much more paperwork these days and you have to jump through more hoops.

What did the new bankruptcy law change? Modesto, California Lawyer

The lobbyist succeeded in adding the “means test” to bankruptcy filings. The means test is a determination to see if the debtor has sufficient “disposable income” to be pushed into a chapter 13 bankruptcy. If a debtor has too much money lying around at the end of the month, then they don’t qualify for the chapter 7 bankruptcy and must pay back a portion of their debt in a chapter 13.

Before you can file for either a chapter 7 or 13 bankruptcy, you must take a credit counseling class. You must also take another debtor education class after you file. Neither class is difficult or time consuming and you can take them online. 1 out of every 10 bankruptcy cases closes without a discharge because the debtors fail to take their second class. It’s important to take this class right away and get it to your Modesto attorney so he can file it with the courts.