Congress changed the bankruptcy laws significantly in 2005, making it more difficult for individuals to file for bankruptcy. However, bankruptcy relief remains available to those who qualify.
Some important elements to the revised bankruptcy laws are:
- A credit counseling class is required before someone can file for bankruptcy and a financial management class is required after the filing.
- Individuals with higher income must file under chapter 13
- The courts scrutinize bankruptcy filings more closely and require additional documentation
- Lawyers are harder to find and more expensive
- Credit and financial budget counseling is required
- Property must be valued at replacement cost, instead of a "fire sale" cost
- A particular state's exemptions may not available to recent residents (although those residents may be able to use their prior state's exemptions).