We offer bankruptcy help to families throughout California. It is common for clients to ask us if they will qualify given that the bankruptcy laws changed a few years ago. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed at the federal level and now anyone that wants to file needs to meet those guidelines in order to do so. There are multiple components to this legislation. It aims to protect consumers by educating them and better prepare them to manage their finances, take discretion away from judges, and protect creditors by making sure people aren’t constantly filing for bankruptcy. We have found that most of our clients still qualify under the new guidelines.
Here is what you need to know:
Time Delays: If you have filed bankruptcy in the past, there are rules for how long you need to wait before you can file again. This can range from two years to eight years, depending on the type of bankruptcy filing you did before. We can review your case and let you know if you have waited long enough.
Credit Counseling: Before you are allowed to file for bankruptcy you now need to take a mandatory credit counseling class. This can be done online 24/7 or over the phone and only costs around $50. It takes an hour, so this isn’t much of an inconvenience. If you can’t afford a class, they have to let you take it for free. If you have more questions about the course, call us for bankruptcy help.
Means Test: Before, a judge had the discretion to determine if you should qualify for bankruptcy based on your income and expenses. Now, there is an eight-page document that needs to be filled out that uses the income you earned over the past six months and includes mandatory deductions. It also has a provision for qualifying under the median household income guidelines. In Riverside, CA the average household income is $57,096 according to the U.S. Census Bureau. This means that most families in the area would qualify since a couple with four children only needs to make less than $80,910. This has made it easier for most families to qualify and for those that make more than the median income; they can still qualify by using the standard deductions.
Debt Management: If your bankruptcy gets approved, you have to participate in a debt management course. This course teaches how to manage finances and debt payments so that going forward you are less likely to need to file bankruptcy again. We have found that people, who seek bankruptcy help, generally like this course because it provides tools they can use later on and most of our clients want to use this as a fresh start that doesn’t have to be repeated.
We understand that the bankruptcy laws can be confusing and will help you to successfully navigate through them. For more information or a consultation, give us a call.
