New Bankruptcy Law Changes For Chapter 7 Files

Recent Code amendments contained radical reform provisions compared to past revisions. Chapter 7 cases were affected more than those filed under other chapters, and are now subject to sever restrictions for qualification for discharge. The new laws were directly intended to prevent individual from filing Chapter 7 cases, and instead, be forced into Chapter 13. The provisions of Chapter 13 require regular monthly income.

For those people who do not qualify for reorganization plans, or prefer to eliminate debts in less than 3 to 5 years, the income restriction is calculated during the one month before filing. Presumably, anyone who is fired, although receiving unemployment compensation, may be able to qualify for Chapter 7 after average income over the last 180 days falls below the rate of the state annual median. For more information, contact your local attorney, and compare, 4 months receiving unemployment benefits vs. 60 months living below the threshold of poverty.