What are the new guidelines for discharging debt?

[hip2begrandma]

I was hoping someone can point me in the right direction for information about the new bankruptcy laws in 2008. My income is fixed and im over my head in credit card debt. I heard there are some typ of class you have to take and some people dont qualify to discharge debts, is that true? Thank you very very much

[Marks]

As of January 2006, all bankruptcy filers are subject to a "means test" based on income and expenses to determine whether they are eligible for Chapter 7 or if they must file Chapter 13. You may be prevented from filing Chapter 7 if your income is above your state's median and you can afford to pay a certain portion of your unsecured debt payments. The court also can require you to file Chapter 13 if it believes that you are abusing the system by filing for CH. 7.

A means test is used to determine if a consumer may file for Chapter 7. The test considers your income in relation to the median income in the state where you live. Median incomes vary from state to state. For example, 2004 median income for one person in New Mexico is $30,614 while in New Jersey it is $52,493. You can find state median income statistics for individuals and families on the U.S. Trustee web site under "Means Testing Information." If your income exceeds the state median and the test further determines that you can pay at least $6,000 over five years ($100 a month) toward your debts, you must file under Chapter 13. Internal Revenue Service (IRS) living standards are used as guidelines for determining allowable housing costs, food, clothing and other expenses and to determine how much money you have left over each month to repay your debts.

If you file under Chapter 7, you must provide a copy of your latest tax return or your case will be dismissed. For Chapter 13, you must provide tax returns for the past four years. If you have not submitted your income taxes, you must do so before you will be allowed to file bankruptcy. In addition, you must provide a number of other documents, including:

1. A certificate of credit counseling
2. Evidence of earnings in the past 60 days
3. Proof of monthly net income
4. Photo ID

You cannot file for bankruptcy until you provide proof that you have participated in pre-bankruptcy credit counseling within the six months before you file. Before your bankruptcy case can be closed (discharged), you must complete mandatory post-bankruptcy money management training. You must pay the fees for these courses and the services must be provided by an agency certified by the U.S. Trustee.

Source: http://www.expert-credit-advice.com/ban ... _facts.htm