Augusta GA Lawyer – Bankruptcy Rule Amendments in 2006

Augusta GA Lawyer – Bankruptcy Rule Amendments in 2006

During the ten year period, between 1994 and 2004, bankruptcy rates in the United States nearly grew twice as much. The government’s response was to take a detailed look at reasons parties were filing for protection. New statutes were enacted to make sure that individuals and businesses had valid reasons for applying for bankruptcy.
One of the major statute regarding bankruptcy that was instated in the US in 2004 was the Bankruptcy Abuse Prevention and Consumer Protection Act. This statute went into effect in October 2005. This law resulted quite a stir in the financial and bankruptcy law arenas. In addition to it more difficult to qualify for Chapter 7 bankruptcy, or complete bankruptcy, this statute brought about tougher rules and budgets on Chapter 13 filers.
One big requirment the statute is the requirement for filers to have filed tax returns for four years in a row prior to being eligible for protection. Dischargeable debts, or those debts where personal liability is withdrawn by the court system, is more difficult to come by. The statute mandates that filers prove good reason for dischargeable debt and mandates more filers to take responsibility with non-dischargeable debt budgets.

Chapter 13 bankruptcy allows the filer to retain certain assets upon proving only limited debt and a steady income. This bankruptcy is best suited for those filers who are a major financial difficulty but still can pay for certain assets. The court will set up a repayment schedule and budget that permits for full repayment of mortgages or auto loans within three to five years.
Where repayment is simply not possible, the bankruptcy Act requires that a filer file under Chapter 7 bankruptcy. This is often called as complete liquidation of assets, except for exempt items. Exempt items in a bankruptcy hearing are determined by the court and are generally items that are a necessity. The courts will divide debts into two groups: non-dischargeable and dischargeable debt.

———————
We are Augusta GA bankruptcy lawyer | Georgia attorney that assist their clients in filing for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Augusta GA.