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Bankruptcy Abuse Prevention Consumer Protection Act 2005

Posted on: 28th Jul, 2005 11:39 pm
The congress has passed the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" this spring. It will be effective from October 17th, 2005. It has been enacted so that people cannot avoid paying their debts when they can at least pay a part of it. The major changes to this law are:
  • Means Test:
    These are tests performed to identify the ability of the debtor to clear their debts. This is done to find out whether a family is earning above the average income in their state. It is also found if the family has sufficient extra income to pay a part or whole of their debts.

  • Proof of Income:
    Debtors intending to file bankruptcy must provide the government with the most recent tax returns.

  • State Exemptions:
    A minimum of 2 years residency is needed to take advantage of state exceptions.

  • Counseling:
    Debtors need to go through a federally approved credit counseling program within six months before filing the bankruptcy.

  • Child support and alimony:
    Payments regarding child support and alimony have been given top priority when dividing excess income.
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Related References:
do I have to payback the bank after filing chapter 13
Posted on: 25th Jun, 2009 02:47 pm
Hi mimi!

Welcome to forums!

After filing Chapter 13, the lender will give you a payment plan which will help you in repaying the debts within 3-5 years. Once you pay off the debts according to the plan, your bankruptcy will be discharged.

Feel free to ask if you've further queries.

Posted on: 29th Jun, 2009 12:19 am
I owe a large sum of money for Federal Student Loans as well as other debt. Does bankruptcy wipe out everything?
Posted on: 18th Feb, 2010 03:43 pm
Bankruptcy will not help you in discharging your Federal student loans. Apart from student loans, back taxes, fraudulent debts, alimony, child support, large purchases as well as Government penalty do not get discharged in bankruptcy. Apart from this, other unsecured debts do get discharged.
Posted on: 19th Feb, 2010 01:31 am
I am being sued by a lender of 2nd loan on foreclosed property. Case management date has been set. I am considering filing for Ch. 13 since I cannot pay $60K. Should I pursue Ch. 13 or represent myself in the court to fight the case. Thanks, Nash
Posted on: 12th May, 2010 10:41 pm
Hi Nash!

Welcome to forums!

Before filing chapter 13, I would suggest you to contact your lender and inform him about your financial situation. If the lender is convinced about your situation, then he may forgive the dues or may give you an affordable repayment plan to pay off the dues.

Feel free to ask if you've further queries.

Posted on: 13th May, 2010 11:00 pm
i am 30k behind on mort. and 82k in other debts ie unsecured i have approx 55k in assests what will my repayment plan be for 5 years
Posted on: 20th Sep, 2010 09:33 pm
Welcome job,

Your creditors and trustee will go through your financial situation and let you know whether or not you will get a 3 or 5 years repayment plan.
Posted on: 21st Sep, 2010 12:05 am

I am thinking about filing for chapter 13 and would like to know if its the right thing do for me my family. My financial history entails:
1.two homes one rental foreclosed on. the other primary residence, in process of loan mod. soon to be foreclosed

2. credit card debt $80,000 havn't been paying for 6 months, already lawsuit on one ($26,000)
3. pool loan $60,000 havent paid 8 months.

My income is about $8000 gross a month. Spouse not working, have 2 kids

I live paycheck to paycheck. Can someone help me and give me some advice if chapter 13 is the best thing for my family and I... I need a fresh start.

Thank in advance
Posted on: 28th Sep, 2010 12:39 am
In the repayment plan for chapter 13. Does one end up paying for all debts within this 3-5 repayment plan or is it just a fraction of the amount of debt that has to be repaid and depending on what the debtor can afford???
Posted on: 28th Sep, 2010 12:46 am
hi mharly,

chapter 13 bankruptcy will not help you in starting afresh. it will help you in reorganizing your debts. the repayment plan will help you in become current on your mortgage and other debts. if you wish to get rid of all your debts, then you should go for chapter 7. you can even contact a bankruptcy attorney and take his opinion in this regard. he will help you in a better way in this regard.

Posted on: 28th Sep, 2010 10:59 pm
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