Bankruptcy Chapter 7 Laws
In the recent past, Chapter 7 bankruptcy laws went through a major renovation that put some serious crimp over the plans of many people in starting over. The renovated laws of bankruptcy involve substantial increase in the number of Chapter 13 filings since it had been more difficult to file for Chapter 7. It is enacted with tough guidelines that will cancel the manipulation of the system by those debtors who want to wipe out their incurred debts without restraints. Because of the difficulties of the new laws concerning the filing of Chapter 7 bankruptcy, many people are forced to abide by the laws and guidelines of Chapter 13 filling instead.
For those who consider to file for Chapter 7 Bankruptcy, it is important that they understand the laws before proceeding to file. Based on the new bankruptcy laws of Chapter 7, numerous reasons can qualify a debtor in filing and an assessment is done by the court unto the financial circumstances of the person. The IRS had provided certain allowable limitations for assessing essential living expenses such as housing and food. Any debtors who spend more are not qualified to file for Chapter 7 Bankruptcy. In addition, an assessment known as "means test" is applied while the earnings of the debtor are calculated based on food and housing allowances.
Other changes made on the new bankruptcy laws of Chapter 7 include restrictions on filing in any state. The debtor must be a resident in the state for at least two years before he or she file for bankruptcy. Another change made on the laws is the inclusion of mandatory financial counseling as well as the expensive items purchased within a period of 60 days will be needed to pay in full. This also applies to cash loans received within the same period.