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The Bankruptcy Abuse Prevention and Consumer Protection Act was became successful on October 17, 2005 (except for a few provisions). This amendment to the Bankruptcy Code is a main revision of the 1978 Bankruptcy Code and offers mainly with consumer bankruptcy. It was passed in response to rising bankruptcy filings and is ba... Disclaimer The following post meant for reference only, and is not intended to be legal advice. Be positive to consult a lawyer for a full explanation. The Bankruptcy Abuse Prevention and Consumer Protection Act was became successful on October 17, 2005 (except for a couple of provisions). This amendment to the Bankruptcy Code is a main revision of the 1978 Bankruptcy Code and deals mainly with consumer bankruptcy. It was passed in response to rising bankruptcy filings and is based on a idea of increased individual responsibility. This article offers a quite brief explanation of the signifies test that is developed to dump some debtors out of Chapter 7 and into Chapter 13 Most debtors would of course favor to discharge their debts below Chapter 7 rather than pay into Chapter 13. For debtors with the capacity to pay, nonetheless, this will not be almost as automatic as ahead of. Under the earlier version of the Bankruptcy Code, a discovering of "substantial abuse" had to be made ahead of a debtor was barred from Chapter 7 relief. Beneath the new law, this standard is reduced to "abuse" (a single act of abuse is enough rather than substantial abuse). Abuse is now presumed for debtors deemed to have the signifies to pay into Chapter 13. For extra information, consider checking out visit my website. This means test applies to debtors net existing monthly incomes greater than their state's median revenue. The indicates test has two prongs 1. If the debtors net monthly revenue after deductions is at least 166.67, the debtor is presumed to be ineligible for Chapter 7 relief. 2. To get supplementary information, please have a view at http://www.purevolume.com/chapterattorneyhhh/posts/9768250/What+Is+A+Bankruptcy+Firm3F+. To get different interpretations, you are able to check-out http://www.kiwibox.com/losangelesitx/blog/. If the debtors net monthly revenue is at least 100 and the debtor is deemed to have the means to spend at least 1-fourth of his/her unsecured debt more than five years, then the debtor is presumed to be ineligible for Chapter 7 relief. What all this means is that debtors who file under Chapter 7 will be forced to pay as much as they can beneath Chapter 13 if they can afford to unless they can prove that they are not abusing the technique by filing beneath Chapter 7 . The word presumed just signifies that whatever is presumed will be taken as correct unless confirmed otherwise - the burden of proof has switched to the debtor to prove there is no abuse rather than on the government to prove "substantial abuse" as prior to.. Clicking http://www.feedbooks.com/user/1423557/profile certainly provides suggestions you can use with your cousin.Westgate Law 11766 Wilshire Blvd. #1170 Los Angeles, CA 90025 (800) 891-1995