Articles -
New Bankruptcy Law - Effects on Natural
Disaster Victims
You’ve heard of the new bankruptcy law, whether you plan to file for
bankruptcy or not. The law referred to as "The Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005", took effect on October
17, 2005. The law imposes restrictions on who can file for bankruptcy
under chapter 7.
Following Hurricanes Katrina and Rita, the United States Trustee’s
office announced special guidelines intended to lessen the impact of the
new law on victims of natural disaster. Many victims of the hurricane
not only lost their homes but have no way of meeting the stringent load
of paperwork required to file for bankruptcy.
Some of the exemptions made for victims of natural disaster include
the following:
Mandatory Credit Counseling – The requirement to undergo compulsory
credit counseling is waived.
Paperwork Load – Filers who cannot provide the paperwork needed to
file for bankruptcy will not be penalized.
Passing the “Means Test” – Filers have a lot more leeway, when it
comes to passing the means test because lost income and other negative
financial effects of the disaster are considered as “special
circumstances” that may allow a debtor, who otherwise wouldn’t pass the
“means test” to file for bankruptcy under chapter 7.
Access the
summary list of changes per the new bankruptcy law and how potential
filers will be affected.
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