Federal Bankruptcy Laws

Bankruptcy Reform Law of 2005

The Bankruptcy Reform Law was set in place to govern the process of bankruptcy and those who file. In general terms the Bankruptcy Reform Law of 2005 impacts people in four ways:

Eligibility

If your family earns over the median income, then you must file Chapter 13; you are not eligible to file Chapter 7. For those close to the median, you may not qualify to file a Chapter 7 and you may have too little income to file a Chapter 13. Using IRS guidelines, the attorneys calculated incomes likely to be covered by the means test. If your income is greater than the allowed expenses from the IRS guidelines, then expect trustees and creditors to object to a Chapter 7 even if your income is below the median. In Texas, the median income for an individual is about $38,000, or about $65,000 for a family of four.

Credit Counseling

Before you file, you will be required to attend a credit-counseling course (offered by phone or Internet) that explains the various types of bankruptcy and what the pros and cons of each is. Maida Law Firm, P.C. can help you do this. You must get this from an approved not-for-profit agency. After filing, you will be required to attend a second financial management course. You must complete the courses, and pay for them, before filing bankruptcy and obtaining any bankruptcy discharge.

No Eviction Protection

Bankruptcy will no longer protect you if you are a tenant facing eviction. If you filed a bankruptcy in the previous two years, then you will have little or no protection from foreclosure either. You may find yourself with fewer exemptions than in the past as well.

Verification by a Bankruptcy Attorney

Your bankruptcy attorney, whether it is a lawyer at Maida Law Firm, P.C. or anywhere else, will have to check and verify everything you tell them.

A Houston bankruptcy attorney from the Maida Law Firm, P.C. can help you know how these laws coincide with your case. You will need to provide your lawyer with:

  • Three years of tax returns and the transcript from the IRS
  • At least one year of bank, credit card, and loan statements
  • At least six months of pay stubs (from all employers)
  • An appraisal on your home and vehicles
  • A comprehensive list of personal property
  • Exact addresses used by all of your creditors

If you miss anything, and if the attorney does not catch it in the review of your paperwork, the trustee, the court, or any creditor can object to your case. At that point, a lawyer will have to prove the figures and information. If the lawyer cannot, then the firm will have to pay the costs of their attorney's objection. In addition, you may not get a discharge of some or all your debts. There is no limit to this firm's liability.

Contact a bankruptcy lawyer from the Maida Law Firm, P.C. for more information on the bankruptcy laws and how this firm can help in Beaumont and Houston! We have offices in each city, with the Houston office available by appointment only.

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