From
The KDDK Advantage - August 2006
Bankruptcy: Creditors’
Rights Improved
Debtors seeking to avoid paying their
creditors through bankruptcy must now complete a “means
test” to determine if they can afford to make payments
to creditors through a Chapter 13 bankruptcy rather than
eliminating most of their debts in a Chapter 7 liquidation
bankruptcy. The “means test” is part of the reforms created
by the Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005 (BAPCPA), set in place late last year to assist
creditors that are faced with debtors who attempt to avoid
repayment through the use and abuse of bankruptcy laws.
Other BAPCPA provisions that will help
creditors include:
-
Requiring debtors to live within a state for 730
days before they may claim state exemptions, and limiting
the debtor’s homestead exemption to a maximum of $125,000
-
Increasing the amount of certain creditors’ secured
claims by using replacement value for personal property
-
Terminating the postponement of collection efforts
when bad-faith filings are made within one year of a
previously-dismissed bankruptcy case
-
Limiting the amount of debt that can be forgiven
when certain types of purchases are made within 90 days
of a bankruptcy filing
-
Enforcing newly-introduced consequences when a debtor
fails to complete a required financial management course
or withholds records or documents in an attempt to conceal
property from creditors
If you have a question about creditors’
rights or BAPCPA, contact Michael DiRienzo at 423-3183
or mdirienzo@kddk.com. KDDK houses and operates Professional
Business Collections, Inc., a collections agency that
enables creditors to maximize the collection of bad debt
through the legal process.
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