The new bankruptcy law passed in 2005 (BAPCPA)

New restrictions on filing Chapter 7 Bankruptcy, The Bankruptcy Abuse Prevention and Consumer Protection Act.

Debtors hoping to file Chapter 7 bankruptcy in Missouri and Illinois face new guidelines enacted in 2005 intended to make the Chapter 7 filings a choice for people who are not able to repay a meaningful amount to their creditors.

The decision to file bankruptcy is typically a difficult choice because clients lack the information about how bankruptcy can help and how the process is. Many clients think they face their creditors or have to give explanation about their finances. However, filing for bankruptcy is a formalized procedure. Bankruptcy clients don’t meet a judge and don’t have to deal with their creditors.

However, the bankruptcy law made filing bankruptcy more complicated and confusing.

Consulting with a good bankruptcy attorney is more important than ever. Our bankruptcy attorneys in St. Louis, St. Charles, Florissant and Metro East offer a free consultation and are one of the most experienced bankruptcy attorneys in the region.

The new law added a mean test to the bankruptcy petition, also called Form 23a. The debtor has to state his average monthly income for the last 6 months. If that income is below the median income for his county he lives in, the debtor automatically qualifies to file for chapter 7 bankruptcy. If the income is above this threshold, the bankruptcy attorney has to do a complicated calculation by deducting IRS standard expenses, actual expenses, and monthly payment on secured debt. If the calculation shows that the debtor has no meaningful amount left over, he still qualifies to file a chapter 7 bankruptcy case, no matter how high is monthly income in fact is.

For those who do not qualify due to surplus income, there is a possibility of passing the means test by completing Form 22A. Filling out the document called Chapter 7 Statement of Current Monthly Income and Means Test Calculation can determine eligibility based on special circumstances. At that point, the facts can get tedious and the paperwork can get overwhelming.

Our experienced bankruptcy attorneys in St. Louis will be able to determine whether you qualify to file a chapter 7 bankruptcy case or how much the monthly payment in a chapter 13 would be.

For either chapter, you would need to complete a credit counseling course. These coursed can be done over the phone or through the internet and take only a few minutes. A second class, the so called pre-discharge or Financial Management Certificate had to be done after filing of the bankruptcy case. Both courses must be offered by providers approved by the state you are filing in. Credit counseling must be taken within a six-month timeframe before filing bankruptcy while the education class must be completed before you can be discharged from bankruptcy.

If you have questions regarding exemptions or other factors influencing your ability to repay debts, refer to a Bankruptcy attorney in St. Louis or the St. Louis Metro East area. The law passed in 2005 did not change the access to debt relief it made it more time consuming to gather all required information. However, prices in the St. Louis Metro Area have not been significantly increased since 2005. Our office offers one of the lowest attorney fees in the region and offers affordable payment plans.

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