There is a widespread misconception amongst Oklahomans that with the new bankruptcy law of 2005 the average debtor lost the right to file bankruptcy, except in the most extreme circumstances. Although the new bankruptcy laws have made it more difficult for some to file bankruptcy, the average individual who finds himself overwhelmed by debt can still find relief through federal and state bankruptcy laws.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was the result of a huge push by credit-card companies who argued that the old bankruptcy laws allowed consumers to use the system to irresponsibly run away from their debt. However, many in the legal field believe that while reforms may have been needed, the new laws have made a complicated process even more complicated and that this is done at the expense of hard working individuals and families who are honestly in need of debt relief.
Now, even in the most straight forward and simplest of cases, it is more difficult for an individual to file for bankruptcy without an attorney. The process is more complicated and there are many more documents to submit. Furthermore, the system is far less forgiving of mistakes than before.
In addition, the new laws have made filing for bankruptcy more expensive. Attorneys are now required to be personally responsible for the accuracy of the information you submit to them and because the laws are more complicated, they are required to spend more time working on your case. This means more billable hours and higher legal fees for their clients.
As mentioned above, the new laws have also made it more difficult for some to file for bankruptcy. Now, in order to file for Chapter 7 bankruptcy, you are required to pass a means test to verify that your income is insufficient to repay your debt. If your income is too high to pass, you will only be allowed to file for Chapter 13 bankruptcy, under which you will have to repay at least a portion of your debt.
Another important change brought about by the reforms of 2005 is the need to complete a credit-counseling course before you file for bankruptcy. This course must be taken no more than 180 days before you file and from an approved provider. After you file, you are also required to complete a course on budgeting and debt management in order to receive a discharge.
Other changes to the bankruptcy laws include changes to how property is valued and to the way in which disposable income is determined under Chapter 13 bankruptcy. You are now more likely to have your high value items sold by the trustee to satisfy creditors and those who file Chapter 13 will be required to live on much tighter budget than before.
Free Consultation: Oklahoma City Bankruptcy Attorney
Despite these changes, bankruptcy is still a useful an accessible option for honest debtors with insufficient income to repay their debts and for those seeking to reorganize their debt payments. For more information on the specifics of the new bankruptcy laws and how they can work for you, contact an experienced Oklahoma bankruptcy attorney. For a free confidential consultation about your rights in bankruptcy court and the potential benefits of filing bankruptcy, contact the Dept Line Law Office at (918) 878-0010. If you prefer e-mail, send us your question using the form at the top right of this page and we’ll answer your question as soon as possible.