5137 Golden Foothill Parkway, Ste. 110
El Dorado Hills, CA 95762
(916) 789-9810
drmorris@morrislawgrp.com

8880 Cal Center Dr., Ste 400
Sacramento, CA 95826
(916) 789-9810
drmorris@morrislawgrp.com

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WHAT ARE THE RECENT CHANGES TO THE BANKRUPTCY LAW?

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made significant changes to the Bankruptcy Code which affects all debtors filing cases on or after October 17, 2005. Here are some of the major changes:

1. Waiting periods if previous filing: A debtor who has previously filed a bankruptcy and obtained a discharge, may not receive another discharge unless there has been sufficient time between the two cases. There is an 8 year period [calculated from the filing date of the first case and the filing date of the second case] for persons who have received a discharge in a chapter 7 and wish to file another chapter 7 case, and 6 years if the first case was a chapter 13. To receive a chapter 13 discharge, the period is 4 years if the first case was a chapter 7, and 2 years if the first case was a chapter 13 case.

2. Mandatory Pre-Bankruptcy Credit Counseling: All individual debtors who file bankruptcy on or after October 17, 2005, must undergo credit counseling from an approved counseling agency within 180 days before filing for bankruptcy. A statement concerning compliance with the credit counseling requirement must be completed and filed by the debtor.

3. Mandatory Debtor Education Course after Filing: Every individual debtor in a chapter 7 case or chapter 13 case must complete a personal financial management (or debtor education) course before they will be granted a discharge. This debtor education course is separate from and required in addition to pre-bankruptcy credit counseling. To comply with the debtor education requirement, the course must be completed after the filing of the petition. In chapter 7 cases, Official Form 23 should be filed within 45 days of the first date set for the Meeting of Creditors. In chapter 13 cases, the form should be filed no later than the date of the last payment made by the debtor under the plan or the date of the filing of a motion for a discharge prior to completion of the plan. If the debtor fails to file Official Form 23, their case can be closed without discharge.

4. Tax Returns - Individual debtors must provide a copy of their most recent tax return (or a transcript of the return) to the trustee and any creditor who requests a copy no later than seven days before the date first set for the Meeting of Creditors.

5. Wage Statements - Copies of all wage statements, payment advices, or other evidence of payment from an employer provided to the debtor within 60 days before the date of filing of the case must be provided by the debtor to the trustee not later than seven days before the date first set for the Meeting of Creditors.

6. Means Test - To provide for the reporting and calculation of “current monthly income” and for the completion of the means test where required, three separate official forms (22A, 22B, and 22C) have been created—one for chapter 7 and one for chapter 13. In chapter 7 cases the means test is used to determine whether a debtor’s filing represents an abuse of the bankruptcy system. Some debtors may be prohibited from filing a chapter 7 case if their income would permit them to make payments to their creditors. In chapter 13 cases, “current monthly income” is used to determine the disposable income that must be contributed to payment of unsecured creditors.

Work with an Experienced Bankruptcy Attorney
from Morris Law Group

At Morris Law Group, your experienced, professional bankruptcy attorney understands that the bankruptcy process can be a stressful and emotional period in your life. With over 28 years of Chapter 7 and Chapter 13 bankruptcy experience, you can count on your attorney to have in depth knowledge to analyze your options, explain the process in plain language, and provide you with choice so you can make an informed decision on whether to pursue bankruptcy or a number of different actions to get you the financial and debt relief you need.

To learn more about how Morris Law Group can assist you through the Chapter 7 bankruptcy or Chapter 13 bankruptcy process, please call us today at (916) 789-9810 or by filling out our contact form for a free and confidential debt analysis.

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