25 (bullsh*t) Changes to Personal Bankruptcy Law
1. Means Test for Chapter 7 Eligibility2. Mandatory Credit Counseling3. Limit on Auto Lien-stripping in Chapter 13
A Chapter 13 plan must provide that a secured creditor retain its lien until the payment of the entire debt, not just the secured portion, where the creditor holds a security interest in a motor vehicle purchased within 910 days of the filing.
4. Mandatory Debtor Education5. Scope of Discharge
Debts owed to a single creditor totaling more than $500 for luxury goods incurred within 90 days of filing are presumed nondischargeable; cash advances of $750 within 70 days are similarly treated.
6. Serial Filings (Chapter 20)
A discharge will not be granted in Chapter 13 if the debtor obtained a discharge in Chapter 7, 11 or 12 within the 4 years prior to the date of filing of the pending case, or in a Chapter 13 case filed within 2 years of the pending case. This provision, though, does not prevent the debtor from filing a Chapter 13 case and receiving the benefits of the stay, including the ability to cure arrearages on secured claims over a period of time.
7. Time between Discharge
A Chapter 7 debtor cannot receive a discharge if a prior discharge was received within 8 years (rather than 6) of the new filing.
8. Homestead Exemption
Debtors may elect state exemptions in the state in which they have lived for the 730 days prior to the bankruptcy. If they have moved during that 730-day period, the state exemptions are those for the state in which they lived the majority of the time for the 180 days before the 730-day period. Regardless of the level of state exemptions, the debtor may only exempt up to $125,000 of interest in a homestead that was acquired within the 1,215-day period prior to the filing, but the calculation of that amount does not include any equity that has been rolled over during that period from one house to another within the same state. For those who have violated securities laws or engaged in certain criminal conduct, the cap is $125,000, notwithstanding a higher State law allowance. To the extent the homestead was obtained through fraudulent conversion of nonexempt assets during the 10-year period before the filing, the exemption is reduced by the amount attributed to the fraud.
9. Reaffirmations10. Limit on Automatic Stay11. Notice to Creditors
Notice to be given by a debtor to creditors must be to the address designated by the creditor, either in communications to the debtor or by the creditor's preferred address as provided to the court. Such notice to creditors must include account numbers.
12. Duration of Chapter 13 Plans13. Dismissal for Failure to file Documents and Schedules
In addition to the list of creditors, schedules of assets and liabilities, income and expenses, debtors must provide:
- certificate of credit counseling
- evidence of payment from employers, if any, received 60 days before filing
- statement of monthly net income and any anticipated increase in income of expenses after filing
- tax returns or transcripts for the most recent tax year
- tax returns filed during the case including tax returns for prior years that had not been filed when the cases began
- a photo ID, among other items.
Failure to provide the documents within 45 days after the petition has been filed (with a possibility of a 45-day extension) results in automatic dismissal of the case after the time period has passed.
14. Attorney Verification Required15. Disposable-income Test in Individual Chapter 11 Case17. Domestic Support Obligations
Support obligations are a first priority, but the administrative costs of a trustee are paid ahead of the support costs to the extent that the trustee is administering assets that can be used to pay support costs. To the extent such support claims have been assigned to or are directly recoverable by a governmental entity, such claims are subordinated to the support of claims that are not assigned. The stay does not apply to the payment of a domestic support obligation from property that is not property of the estate or to the enforcement of a wage-withholding order under a judicial or administrative order, or statute, including obligations accruing from both before and after the filing. Failure to remain current on support claims is grounds for conversion or dismissal of a case, the debtor must be current on post-petition obligations in order to confirm a plan, the plan must provide for priority payment or support debts (with a limited cramdown available for claims assigned to or owed directly to a governmental unit), and the debtor may not obtain a discharge unless such obligations are paid in accordance with the terms of the plan.
18. Superdischarge in Chapter 13 Reduced20. Asset-protection Trusts22. Changes in Treatment of Taxes23. Eviction Proceedings
The stay will not prevent or halt a detainer action if the debtor failed to pay rent after filing.
24. Tax Returns Mandatory25. Nondischargeability of Student Loans Expanded
Student loan nondischargeability is extended to for-profit and nongovernmental entities.
1. Means Test for Chapter 7 Eligibility2. Mandatory Credit Counseling3. Limit on Auto Lien-stripping in Chapter 13
A Chapter 13 plan must provide that a secured creditor retain its lien until the payment of the entire debt, not just the secured portion, where the creditor holds a security interest in a motor vehicle purchased within 910 days of the filing.
4. Mandatory Debtor Education5. Scope of Discharge
Debts owed to a single creditor totaling more than $500 for luxury goods incurred within 90 days of filing are presumed nondischargeable; cash advances of $750 within 70 days are similarly treated.
6. Serial Filings (Chapter 20)
A discharge will not be granted in Chapter 13 if the debtor obtained a discharge in Chapter 7, 11 or 12 within the 4 years prior to the date of filing of the pending case, or in a Chapter 13 case filed within 2 years of the pending case. This provision, though, does not prevent the debtor from filing a Chapter 13 case and receiving the benefits of the stay, including the ability to cure arrearages on secured claims over a period of time.
7. Time between Discharge
A Chapter 7 debtor cannot receive a discharge if a prior discharge was received within 8 years (rather than 6) of the new filing.
8. Homestead Exemption
Debtors may elect state exemptions in the state in which they have lived for the 730 days prior to the bankruptcy. If they have moved during that 730-day period, the state exemptions are those for the state in which they lived the majority of the time for the 180 days before the 730-day period. Regardless of the level of state exemptions, the debtor may only exempt up to $125,000 of interest in a homestead that was acquired within the 1,215-day period prior to the filing, but the calculation of that amount does not include any equity that has been rolled over during that period from one house to another within the same state. For those who have violated securities laws or engaged in certain criminal conduct, the cap is $125,000, notwithstanding a higher State law allowance. To the extent the homestead was obtained through fraudulent conversion of nonexempt assets during the 10-year period before the filing, the exemption is reduced by the amount attributed to the fraud.
9. Reaffirmations10. Limit on Automatic Stay11. Notice to Creditors
Notice to be given by a debtor to creditors must be to the address designated by the creditor, either in communications to the debtor or by the creditor's preferred address as provided to the court. Such notice to creditors must include account numbers.
12. Duration of Chapter 13 Plans13. Dismissal for Failure to file Documents and Schedules
In addition to the list of creditors, schedules of assets and liabilities, income and expenses, debtors must provide:
- certificate of credit counseling
- evidence of payment from employers, if any, received 60 days before filing
- statement of monthly net income and any anticipated increase in income of expenses after filing
- tax returns or transcripts for the most recent tax year
- tax returns filed during the case including tax returns for prior years that had not been filed when the cases began
- a photo ID, among other items.
Failure to provide the documents within 45 days after the petition has been filed (with a possibility of a 45-day extension) results in automatic dismissal of the case after the time period has passed.
14. Attorney Verification Required15. Disposable-income Test in Individual Chapter 11 Case17. Domestic Support Obligations
Support obligations are a first priority, but the administrative costs of a trustee are paid ahead of the support costs to the extent that the trustee is administering assets that can be used to pay support costs. To the extent such support claims have been assigned to or are directly recoverable by a governmental entity, such claims are subordinated to the support of claims that are not assigned. The stay does not apply to the payment of a domestic support obligation from property that is not property of the estate or to the enforcement of a wage-withholding order under a judicial or administrative order, or statute, including obligations accruing from both before and after the filing. Failure to remain current on support claims is grounds for conversion or dismissal of a case, the debtor must be current on post-petition obligations in order to confirm a plan, the plan must provide for priority payment or support debts (with a limited cramdown available for claims assigned to or owed directly to a governmental unit), and the debtor may not obtain a discharge unless such obligations are paid in accordance with the terms of the plan.
18. Superdischarge in Chapter 13 Reduced20. Asset-protection Trusts22. Changes in Treatment of Taxes23. Eviction Proceedings
The stay will not prevent or halt a detainer action if the debtor failed to pay rent after filing.
24. Tax Returns Mandatory25. Nondischargeability of Student Loans Expanded
Student loan nondischargeability is extended to for-profit and nongovernmental entities.
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