Impact Of New Laws On Bankruptcy

If you were to take a poll amongst every Tucson bankruptcy attorney regarding the intention versus impact of the new federal bankruptcy legislation, you are likely to get mixed results. One Tucson bankruptcy attorney might feel like that it is the best thing to ever happen to the world of bankruptcy while the next Tucson bankruptcy attorney might say that it is the worse piece of legislation to hit the bankruptcy arena in the last 50 years. Regardless of which way their thoughts and feelings sway, one thing is for sure: the Bankruptcy Abuse Prevention Consumer Protection Act of 2005 has had a profound impact on nearly all aspects of the bankruptcy arena, whether those impacts are perceived to be good, bad, or indifferent.
Prior to the late October implementation of the Bankruptcy Abuse Protection Consumer Protection Act, almost anyone could seek chapter 7 personal bankruptcy protection with little scrutiny. Now, one must go through painstaking measures to prove that they actually need the federal assistance. This is done by submitting countless financial documents for analysis. The purpose of the new stringent requirements was to weed out the corrupt bankruptcy abusers and scammers and preserve the sanctity of bankruptcy for people who really need and deserve it. Now potential filers must do a variety of things to show that they can no longer handle their debt on their own in order to meet the qualifications for a chapter 7 filing. For starters, they must attend a credit counseling session where effective money management techniques are practiced. One must have the certificate of completion before they can begin to file their paperwork. They must also pass the means test. This test evaluates the income of the potential filer with the average median income of similar filers in that physical area. If they do not qualify based on the means test then they can file for a chapter 13.



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