Do the “New” Bankruptcy Laws Impact You?

  • What Is the Impact of the New Bankruptcy Law Climate?

    In 2005, The Bankruptcy Abuse Prevention and Consumer Protection Act went into effect with the goal of preventing abusive bankruptcy filing practices.

    The truth about the “new bankruptcy law”: Bankruptcy still helps millions of Americans clear their debt and stop foreclosure and repossession. Most people who want to file bankruptcy still can. The new law hasn’t stopped many people from filing who would have filed before the law went into effect and continue to file bankruptcy in 2014.

    Ask a local attorney how the bankruptcy laws may help you. Fill out this quick bankruptcy case review form to connect with a lawyer for a free consultation.

    The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005

    The consumer credit industry lobbied Congress for nearly ten years in an effort to pass the kind of bankruptcy reforms adopted in 2005.

    The industry went to great lengths to paint a picture of consumers using bankruptcy as a means of financial planning, running up huge credit card bills with complete disregard for their ability to repay them, and then discharging them in bankruptcy when the well ran dry.

    On October 17, 2005, the changes they’d been pushing for more than a decade took effect. But the impact hasn’t been quite what the credit industry intended.

    Filing Bankruptcy Under the New Bankruptcy Laws in 2014 and Beyond

    The bankruptcy laws haven’t seen much update since the 2005 BAPCPA reform, and filing bankruptcy in 2014 is virtually no different than any other recent year.

    In order to file, you must take a credit counseling course. If you intend to file Chapter 7 bankruptcy, you must qualify under the means test, which compares your disposable income to your total amount of debt.

    Is it harder to file bankruptcy under the new law?

    Not really. It’s certainly “harder” in the sense that it takes more work. And that may work to the advantage of the credit industry, since some consumers will be discouraged by the additional requirements. However, with the assistance of a local bankruptcy attorney, the process is still quite manageable.

    In the more significant sense, it’s not much harder to file for bankruptcy. The new legislation was supposed to weed out “abusive” filers-the ones the credit industry thought were running up credit card bills knowing that they could “always file bankruptcy”.

    But the industry (and Congress) overlooked some very important information-information that consumer bankruptcy attorneys and other consumer advocates attempted repeatedly to share with them.

    Those “abusive” filers made up a very small percentage of bankruptcy petitioners. The vast majority of people filing bankruptcy do so because of huge medical bills not covered by insurance, divorce, job loss, or a death in the family.

    Early reports from credit counseling agencies indicated that fewer than 4% of prospective bankruptcy petitioners had any other realistic options.

    Fortunately, many people are not disqualified from filing for bankruptcy protection under the new law.

    The Chapter 7 Means Test

    The Chapter 7 means test was much touted as the means by which the bankruptcy process would weed out those abusive filers, people who didn’t really need to file for bankruptcy protection and just didn’t feel like paying their bills.

    And perhaps the means test does that, but the overall impact is very small because there are (and always have been) so few bankruptcy petitioners in that situation.


    The means test is a two-step process. The first step compares the debtor’s income to the median income in his state. If his income is lower than the median income for his family size, the test ends there. There is no presumption of abuse, and the debtor can file for Chapter 7 bankruptcy.

    For most Chapter 7 bankruptcy petitioners, the means test ends there. However, even when the debtor’s income exceeds the median income in his state, he may still qualify for Chapter 7 bankruptcy depending upon his expenses.

    Will the Law Impact My Bankruptcy Filing?

    There are some new requirements for bankruptcy petitioners. First, you’ll have to complete an approved Credit Counseling Briefing before you file for bankruptcy. If you’re planning to file for Chapter 7 bankruptcy, you’ll have to “pass” the means test.

    Your attorney has new obligations to verify the information you provide, which makes the bankruptcy process a bit more expensive and time consuming. Your bankruptcy lawyer will have to obtain valuations on some of your property, your credit report, tax transcripts, and other documentation.

    Before you receive your discharge, whether you’ve filed for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you’ll have to complete an approved Debtor Education Course.

    The Bottom Line: Can I Still File Bankruptcy?

    Probably. A small number of potential bankruptcy filers are impacted by the Chapter 7 means test.

    For everyone else, bankruptcy works pretty much just like it always did, except that there are a few extra steps involved. And even those few people who might be disqualified by the Chapter 7 means test may still be able to opt to file under Chapter 13 bankruptcy.

    A local bankruptcy attorney can assess your situation specifically:

    This page was updated on Jan 9, 2014. Remember, every person’s bankruptcy case is unique. Talk to a bankruptcy attorney in your area to learn how bankruptcy may help you.

    The above summary is not legal advice. Laws may have changed since our last update. For the latest information on bankruptcy laws, speak to a local bankruptcy lawyer in your state.

    Disclaimer: The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or should be formed by use of the site. The attorney listings on the site are paid attorney advertisements. Your access of/to and use of this site is subject to additional Supplemental Terms.

  • Green Card Numbers Could Be Doubling

    filing for permanent residencyFor those immigrating to the United States, the lack of available Green Cards each year is a major hurdle. Only a limited number of applicants can even be approved each year, no matter what their qualifications or reasons are for applying for a Green Card. This means that many people are turned away every year who are pursuing immigration to the US.

    What this means is that there are long lines at immigration centers and that many people are simply turned away every year without even getting a chance to present their case. This makes the immigration process frustrating for many people, as they continually have their hopes dashed and they have to try again another year.

    But that could be changing soon. President Obama has vowed to make changes to the Green Card program. More specifically, he has promised to try to expand on the number of available Green Cards each year by doubling the current total. That’s a lofty goal, and it may not be one he will be able to attain. But even if some progress is made and substantially more Green Cards become available annually, that will be excellent news for those people trying to move into the country.

    It presents an opportunity that is unlike any before, and the changes could be coming as soon as this summer. But those who want to take advantage of the opportunity are going to have to do something about it. They can’t just wait for a Green Card to be handed out. They need to make their case known and make sure they have a compelling case to present.

    This means getting their paperwork in order, meeting the proper prerequisites and getting in touch with immigration to file their paperwork.

    With so many more people trying to file for immigration each year, the workload placed on the immigration officers will be overwhelming. Potential immigrants will have to stand out from the crowd and make sure all their paperwork is in order. One of the best ways to do that is to hire an immigration attorney.

    Many of them will be turning to Carson City’s premier immigration attorney. That’s Cristina M. Hughes Esq, Immigration Law. Her track record handling immigration law case is impressive. For those who are not sure what their chances are to be approved for a Green Card, they should be getting whatever help they can. It’s not enough to simply file an application and hope for the best. Having an immigration attorney on their side can make a huge difference in determining if they are actually going to be able to immigrate.