Recent Changes to Bankrutpcy Law

The most recent changes to the United States Bankruptcy code was the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 passed in April of 2005 and became effective in October of 2005. Among its many changes were a "means test," that was supposed to make it more difficult for individual debtors with high consumer debts to gualify for Chapter 7 bankruptcy.

The Means Test requires the individual to make some very complex calculations with the debtor's last 180 days of income, expenses, and debt payments. The calculations use the avarage annual income for households of equivalent size. This may be significantly different than the debtor's actual budget. If the Means Test shows little or not disposable income, then the individual will qualify for Chapter 7 releif. If not, the debtor must seek relief under Chapter 13.

The new law also requires debtors to enroll in credit counseling and consumer education classes.

Machi & Associates, P.C.
Principle office located in Arlington, Texas.

^*Ted Machi, Board Certified Consumer Bankruptcy Law, Texas Board of Legal Specialization. Barry Johnson, Board Certified Personal Trial Injury Trial Law, Texas Board of Legal Specialization. *Barry Johnson, Board Certified Criminal Law, Texas Board of Legal Specialization. All Other Attorneys Not Certified By The Texas Board of Legal Specialization.

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