- my iParenting
- quick clicks
- moms today articles
- moms today q&a
- community & groups
- research baby names
- prepare a birth plan
- content channels
- ip channel rss feeds
- read birth stories
- read parenting stories
- recommended books
- e-newsletters
- safety recalls
- ip diaries
- ip store
- mom of the month
- dad of the month
- editor's letter
- letters to the editor
From Our Sponsors
- e-newsletters
- Sign up to receive our free weekly e-newsletters
- award-winning products
The iParenting Media Awards program helps parents find the best products for their families.
The New Bankruptcy Laws
How Family-friendly Are They? By Teri Brown
New Factors in BankruptcyAccording to Shore, people will now be required to take a means test that will look at your expenses and income to decide how much you will have to pay back. Expenses the filer thinks are necessary may not be allowed by the court. You will not be able to file if you owe taxes, delinquent student loans or child support. There are residency requirements to qualify for high home equity exemptions that are available in some states. This will usually only affect very wealthy people, who move to take advantage of these exemptions.
What does this means for families? Shore says there is both a negative side and a positive side.
The Negative Side
It will be harder and more expensive to file for bankruptcy. There is a cost for the pre-bankruptcy counseling and the Financial Management Education Course. Chapter 13, which more consumers will have to file, is more expensive than Chapter 7. More filers (Chapter 13 only) will have to sell assets, including their homes, to complete the bankruptcy. The Positive Side
Parents who are not meeting their support obligations will be forced to pay their child support before they can file. Some consumers will find other options through the pre-bankruptcy counseling and may not have to file. The education course will show consumers how to handle their finances properly and avoid problems after the bankruptcy. The restrictions on the amount of equity a filer can keep will make it fairer. Previously, if you lived in a state that had a high or unlimited exemption, you got to keep all the equity regardless of how much you owed while in other states you could keep much less. Knowing that discharging your debt through bankruptcy is going to be harder and more expensive may encourage consumers to seek help earlier, before bankruptcy becomes the only option. "I speak to consumers every day who have made poor choices about filing bankruptcy and some who end up filing multiple times," says Shore. "If this law helps consumers make better choices and avoid future problems, I am all for it."