Impact of Bankruptcy After 2005 Amendments

The fact is that the relief that was once available in Oregon prior to the changes in the bankruptcy laws is still very much available today. The vast majority of people who were eligible for chapter 7 before the law changes are eligible now. The director of the American Bankruptcy Institute recently estimated that the new bankruptcy changes will adversely affect less than three percent of all debtors.

How the law changes may impact you

You may wonder how the law changes will impact you. Ultimately, you will have to cut through a little more red tape in order to file for bankruptcy. In essence, three more steps have been added to the chapter 7 process. Each of these new steps may be easier and simpler than they appear.

• First, you will now have to attend a counseling session before filing. The fact is that the counseling session could take the form of a simple thirty-minute phone call to a credit counseling agency. Some of these agencies are even offering on-line counseling sessions. You may have already spoken with credit counselors before deciding on bankruptcy anyway.
• Second, you will have to attend a financial management course after you file, but before you receive your discharge. The fact is you will only have to do this if the Trustee's office approves agencies to provide the course, or offers the course itself.
• Finally, you will also need to provide more documents to your attorney to file for bankruptcy. These additional documents might have to be made available to creditors under the new legislation. Keep in mind that you can easily obtain these additional documents yourself or with the help of your attorney.

In the worst-case-scenario, the new means test will force some people (up to three percent, as reported by the ABI director as cited above) to file a Chapter 13 bankruptcy. Certainly, it would be desirable to be able to choose your bankruptcy yourself. The fact is though that some portion of this already small percentile would have likely opted to file a chapter 13 anyway. Besides, a Chapter 13 bankruptcy simply requires you to pay back your debts on a payment plan that you can afford. Typically a Chapter 13 plan can still save you thousands and thousands of dollars over struggling to pay debts outside of bankruptcy.

The new law simply requires you to complete more steps. If you would like to discuss your unique situation with a bankruptcy attorney, feel free to give us a call at any of our offices at in the Portland metro area at (503) 352-3690, or fill out our free legal evaluation form and an experienced attorney will discuss your options with you so you can decide whether or not to retain an attorney to file a bankruptcy for you.

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