The Bankruptcy Abuse Prevention and Consumer Protection Act was became effective on October 17, 2005 (except for a handful of provisions). This amendment to the Bankruptcy Code is a major revision of the 1978 Bankruptcy Code and deals primarily with consumer bankruptcy. It was passed in response to rising bankruptcy filings and is ba...

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The Bankruptcy Abuse Prevention and Consumer Protection Act was became successful on October 17, 2005 (except for a few provisions). This amendment to the Bankruptcy Code is a key revision of the 1978 Bankruptcy Code and offers mainly with consumer bankruptcy. The Gordon Law, P.C. Nassau Bankruptcy Lawyer Division Is Now Providing Comprehensive Debt Relief To Long Island Debtors is a novel online database for supplementary information about the meaning behind it. It was passed in response to rising bankruptcy filings and is based on a concept of improved private responsibility. This article offers a extremely brief explanation of the means test that is created to dump some debtors out of Chapter 7 and into Chapter 13:

Most debtors would of course prefer to discharge their debts under Chapter 7 rather than pay into Chapter 13. For debtors with the capacity to pay, nevertheless, this will not be almost as automatic as before. Below the earlier version of the Bankruptcy Code, a discovering of "substantial abuse" had to be made ahead of a debtor was barred from Chapter 7 relief. Beneath the new law, this regular is decreased to "abuse" (one act of abuse is sufficient rather than substantial abuse). Abuse is now presumed for debtors deemed to have the implies to spend into Chapter 13. This means test applies to debtors net present monthly incomes better than their state's median income.

The indicates test has two prongs:

1. If the debtors net monthly income immediately after deductions is at least $166.67, the debtor is presumed to be ineligible for Chapter 7 relief.

two. Discover new information on this affiliated wiki - Click this website: The Gordon Law, P.C. - Nassau Bankruptcy Lawyer Division Is Now Providing Comprehensive Debt Relief to Long Island Debtors. If the debtors net monthly earnings is at least $100 and the debtor is deemed to have the means to spend at least one particular-fourth of his/her unsecured debt more than 5 years, then the debtor is presumed to be ineligible for Chapter 7 relief.

What all this means is that debtors who file beneath Chapter 7 will be forced to pay as much as they can below Chapter 13 if they can afford to unless they can prove that they are not abusing the technique by filing beneath Chapter 7 . For alternative interpretations, please consider taking a look at: The Gordon Law, P.C. - Nassau Bankruptcy Lawyer Division Is Now Providing Comprehensive Debt Relief to Long Island Debtors. The word presumed just implies that whatever is presumed will be taken as accurate unless verified otherwise - the burden of proof has switched to the debtor to prove there is no abuse rather than on the government to prove "substantial abuse" as ahead of..

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