- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy
- Credit Card Debt Relief
- Home Foreclosure
- Garnishment
- Personal Bankruptcy
- Small Business Bankruptcy
- Debt Collection Harassment
- Bankruptcy During a Divorce
- Bankruptcy Reform
- Discharging Student Loans
- Medical Bankrupcty
- Top 10 Bankruptcy Myths
- You Are Not Alone
- Top 5 Reasons for Bankruptcy
- Choosing a Bankruptcy Lawyer
- Do I Need A Lawyer To File Bankruptcy
- Signs You Need to Talk To a Minneapolis Bankruptcy Attorney
Minnesota Bankruptcy Reform Attorney
If you’ve been considering filing bankruptcy, you may have heard about the bankruptcy reform laws and be concerned about how they may affect you. The basics of the law are designed to help prevent abuse of the bankruptcy system by dishonest debtors and most of the provisions revolve around Chapter 7 bankruptcies, as these are the most forgiving to debtors and subject to the most abuse. If you have any questions about bankruptcy reform laws, please get in touch with your Minneapolis bankruptcy attorney.
One of the most important revisions of the laws includes changes to the eligibility to file for a Chapter 7 bankruptcy without the presumption of abuse. For debtors found to be below the median income of their state, no parties are permitted to file a motion to find abuse, providing them with a safe harbor. On the other hand, those with incomes above this median income level may be found abusive by any party, not just the trustee of the bankruptcy. The monthly income used in these calculations is based on a six month period prior to the bankruptcy filing, not on the debtor’s potential or, even, average income. The median income level is based on the family’s size, so those with larger families will have a larger median income figure to compare with. If the family’s income exceeds this median income, then a means test will be applied to determine the party’s eligibility to file for bankruptcy without a presumption of abuse.
The means test is calculated by reducing the debtor’s monthly income by a specific set of deductions set by the IRS. These exemptions include living expenses, insurance, care contributions to nondependent family members, school-related expenses for minor children, contributions to charities and more. If you would like to learn more about these deductions, please speak with your Minneapolis bankruptcy lawyer. If your remaining monthly income is over $166.67, or if your remaining monthly income is over $100 and this is enough to pay off 25% of your debt with unsecured creditors, the presumption of abuse may arise. If your main form of debt is not mostly consumer debt, then this test is inapplicable.
Another big change in the bankruptcy reform requires debtors to receive credit counseling for their debt problems. Within six months of filing, a debtor must complete a briefing with a nonprofit credit counseling agency approved by their U.S. trustee. After this initial briefing, the debtor must then complete a financial management course before a Chapter 7 or Chapter 13 bankruptcy will be discharged. Without completing this course, your bankruptcy will be subject to denial of discharge. If you need help finding and arranging these briefings and courses, your Minneapolis bankruptcy attorney can help.
Lastly, the reform laws have expanded the amount of time between bankruptcies before a person can file again. A debtor cannot file for Chapter 7 protection until eight years after the last filing of a Chapter 7 bankruptcy.
There are other, more specific changes as well, for example issues dealing with the purchase of luxury items. When you come to The Law Office of Minneapolis Bankruptcy Attorney for bankruptcy legal help in Minnesota, you can be sure he is fully experienced in all areas of bankruptcy law. If any of the clauses of the reformed bankruptcy law apply to you, contact our Minneapolis bankruptcy law firm today.