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The New Chapter 13 Bankruptcy Laws Explained
In effect since November 2007, an experienced Maryland chapter 13 lawyer can further explain the new bankruptcy rules. Here are the new requirements to file a chapter 13 case in Maryland and Washington DC:
• You must complete credit counseling – A chapter 13 filer must enroll and finish counseling for credit before filing for bankruptcy. This credit counseling session must be approved by the U.S. Trustee’s office. The counseling will help you determine if you need to file for bankruptcy or if an alternative action can be taken. A Maryland chapter 13 lawyer can help you find an approved counseling location for you.
• Be prepared to show tax returns – In the old bankruptcy rules, a chapter 13 filer must devote all disposable income towards their repayment plan. This income is what is left after paying normal living expenses. The new law dictates that not only you disclose all disposable income, but calculate the disposable income by using allowed expense amounts mandated by the IRS. However, this takes effect if the income exceeds the median of Washington DC and Maryland. The allowed expense amounts must be subtracted from the chapter 13 filer’s average income six months before filing.
• Ability to stop a home foreclosure – Homeowners who file for chapter 13 can stop proceedings on their home foreclosures to create a repayment plan to catch up on mortgage payments. A Maryland foreclosure attorney can be found for more information about foreclosure proceedings.
• Priority is given to unpaid alimony and child support debts – Individuals who are due to receive unpaid child support and alimony will take priority when a chapter 13 filer repays back debts. A Washington DC chapter 13 lawyer can show you how this affects single mothers and children.
• Less automatic stay protections – Before the new rules changes, a chapter 13 filer was given immediate protections from certain creditors. However, the new law excluded some of these protections. These excluded protections include not being able to stop of delay eviction actions, suspension of driver’s license, or child support legal actions.
• Must complete financial education class – In addition to attending credit counseling, chapter 13 filers must attend a government-approved financial management education course before being discharged from bankruptcy.
Who Can Help?
An experienced Washington DC bankruptcy lawyer can assist you with understanding the new rules to bankruptcy. Contact a Washington DC chapter 13 lawyer today to learn more.