Los Angeles Bankruptcy Attorneys & Lawyers

New Bankruptcy Laws

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was passed by Congress and signed into law by President Bush in April 2005. The majority of changes instituted by this new law took effect on October 17, 2005 (180 days after the law was signed), although a few changes took effect immediately after the legislation was signed by the President.

There are new bankruptcy laws now in effect, and, as such, the landscape has changed for those who are thinking about bankruptcy. Now, all debtors will have to get credit counseling before they are allowed to file a bankruptcy case.  They will also need additional counseling on budgeting and debt management before their debts can be wiped out. Some of those filing bankruptcy that have higher incomes will not be allowed to use Chapter 7, but will instead have to repay at least some of their debt under Chapter 13. The law also imposes new requirements on lawyers and attorneys.  This will be tougher to find an attorney to represent you in a bankruptcy case.  However, our staff at Diamond, Burt & Akhkashian, is trained in the new laws and can help you attain your goals. 

BANKRUPTCY CHANGES

Counseling Requirements

Before anyone can file for bankruptcy under either Chapter 7 or Chapter 13, one must complete credit counseling with an agency approved by the United States Trustee's office. The main reason for this counseling is to give someone an idea of whether they truly need to file for bankruptcy or whether repayment plan would get you back to economic stability. 

Counseling is still required even if it becomes clear that a repayment plan is not feasible or you are facing debts that you believe to be unjust and you do not want to pay. You are only required to participate, not to adhere to any repayment plan that the agency proposes. However, if the agency does create and devise a repayment plan, one will have to submit it to the court, along with a certificate proving that you completed the counseling, before you can proceed with the bankruptcy filing.

After the conclusion of your bankruptcy case, you must attend another counseling session, focusing on personal financial management. Once you submit proof to the court that you completed this requirement, can you get a bankruptcy discharge removing your debts.