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In 2005 the U.S. was implemented with new bankruptcy laws
that passed congress. Before that time, filing for chapter
7 bankruptcies was an easy way out of financial
obligations.

Many people spent years being careless with their credit
and debts because it could be fixed with a quick filing for
bankruptcy.

Now that the law has changed, there are more restrictions
for filing a chapter 7. Before the 2005 revision, filers
could choose which code they wanted to file under. Income
did not matter.

One of the biggest changes is that now those with a higher
income will have to file under chapter 13 and therefore pay
off some of their incurred debt. The law also imposed new
restrictions on bankruptcy lawyers. It may be tougher now
to find a lawyer who will represent you in a bankruptcy
case.

In addition to the new income restrictions, there is also
mandatory counseling that debtors must complete before and
after filing for chapter 7 bankruptcy.

Pre-filing, individuals must complete credit counseling and
post-filing, they must complete financial budgeting. These
should have been implemented years before. They are
designed to keep people aware of their spending and keep
them on track.

There is also a change for chapter 13 filers. There is also
a new income demand. All disposable income left after
paying actual living expenses must now go into their
repayment plan.

The IRS now determines the allowed actual living expenses,
not the actual living expenses, if their income is higher
than the median income in their state.