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People used to say that the old bankruptcy law from 1978 was very strict, those people now would certainly be in for a shock when they see just how much stricter the all-new bankruptcy law now is.

The key changes implemented in the new bankruptcy law of today.

A so-called “means test” has been created in order to better assess whether or not a person is right for bankruptcy.

In the Means Test your monthly income is considered, minus certain expenses that are allowed. If you come out above the ?median income? you will have to file for Chapter 13 bankruptcy.

The IRS sets up strict guidelines for what they call ?allowable expenses.? Herein you will be allowed $200 per month for food and $800 per month for housing expenses.

It is essential to understand that there are both state and federal bankruptcy laws. You will find that some state laws are more lenient than others.

You will have to attend a mandatory credit-counseling course that has to be approved by the IRS within 180 days of your filing for bankruptcy. This is not a free course. Instead it will cost you approximately $75.

With the new laws filing for bankruptcy has become even more paperwork driven! You will have to provide and fill out a whole load of forms in order to prove that you are worthy of bankruptcy.

The IRS will want to see among other things, a complete list of all of your secured and unsecured creditors, a list that details where all your income is coming from and where your expenses are coming from, a recent tax return and naturally your photo ID.

There are now hefty legal fees that you will have to pay thanks to this all new bankruptcy law. This is because you will have to have a bankruptcy attorney ?certify? that your figures are accurate.

The interpretation of the new bankruptcy law

By law you are not obligated to use the services of a bankruptcy lawyer, however it is certainly highly recommended that you do in less of course you have qualifications in this area.

If you are thinking that you won’t employ a bankruptcy lawyer in order to save yourself money, it is more than likely that you will end up actually being worse off financially if you go down this route.